Revenge trading is an emotionally-driven trading behaviour in which a trader immediately re-enters the market with larger position sizes after suffering a loss — driven by the psychological urge to quickly recover the lost money rather than by rational analysis of market conditions and risk management principles. The term 'revenge' captures the irrational emotional state: the trader feels wronged by the market and seeks to 'get even' through aggressive, impulsive follow-up trades. Revenge trading is one of the most common and most destructive psychological patterns in Indian retail trading — particularly in the high-leverage, fast-moving Nifty 50 and Bank Nifty options market on expiry days. A trader who loses ₹5,000 on a morning trade may revenge trade with double the position size in the afternoon session, converting a ₹5,000 loss into a ₹20,000 loss in a matter of hours. SEBI's studies of Indian F&O traders consistently document that a significant proportion of retail losses stem from over-trading and revenge trading rather than from the fundamental difficulty of market prediction. The antidote to revenge trading is a strict trading journal, pre-defined daily loss limits (after which no further trading is permitted for the day), a mandatory cooling-off period after significant losses, and position size rules that never allow a single trade to risk more than 1% to 2% of the total trading capital.
For android only
