Free lessons › Trader Psychology & Discipline › The Emotional Stack
Revenge trading
The cascade after a loss and how to interrupt it.
9 min · Beginner
What you'll learn
- Describe the loss cascade that turns one normal loss into a damaged day
- Apply a cooldown timer, a two-loss break and a -2R daily stop
- Calculate how bigger size after a loss breaks your daily risk limit
Key takeaways
- One loss is normal; the cascade that follows it is what damages accounts.
- Use automatic breakers: a cooldown after every loss, a break after two losses and a -2R daily stop.
- Never increase size after a loss, because it turns one mistake into a limit breach.
- Re-entry is only allowed on a fresh setup with its own confirmation.
Glossary
- Revenge trade — A trade taken to recover a loss rather than because a planned setup is present.
- Cooldown timer — A fixed no-entry period after a loss, such as 10 minutes or 3 candles, that interrupts the emotional cascade.
- Daily stop — A maximum realized loss for the day, such as -2R, that ends the session once reached.
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