Lesson 2 of 6 · 7 min

Revenge Trading and Overtrading

Losing hurts. The natural reaction is to want the money back immediately, preferably on the same market and on the same day. This is revenge trading: an order that exists not because the opportunity is good, but because you need the feeling that the damage has been repaired. The market does not know you exist and does not owe you a recovery.

Overtrading is the quieter problem

Overtrading does not have to look dramatic. The crypto market runs 24 hours a day, the chart is always moving, and it always looks like something is happening. An order then becomes a cure for boredom. Every open order brings excitement and a feeling of doing something useful, even though the most useful thing is often to do nothing.

It is only fair to add this: in practice most short-term traders do not beat the market. A large number of orders does not improve your odds by itself. If an approach has no edge, more orders only get you faster to the outcome that costs impose.

Limits that break the cycle

• Daily loss limit: for example −2% of the account. Once you reach it, you close the platform until tomorrow, no exceptions.
• Maximum number of orders: for example three a day. You have to choose, and choosing raises quality.
• Pause after a loss: at least 30 minutes before a new order, preferably spent on a walk rather than at the chart.
• Fixed risk: the amount per order does not rise after a loss. You change it only at the weekly review, never in the middle of a day.
• Trading hours: two set time slots a day. Outside them, the chart stays closed.