While this sounds like the latest superhero saga from the MCU, Avengers Trader is anything but a hero.
In contrast, vengeful (retaliatory) traders are to be feared and avoided. They are the traders who don't admit that they are losing money on their trades, or refuse to accept that they are losing money and not meeting their daily goals. These antiheroes have a very negative sense of failure and usually want to overcompensate. Look at yourself in the mirror and ask yourself - "Am I a vengeful trader?"
To compensate, retaliatory traders will almost always choose the route driven by emotion. In an industry where trading planning and preparation are the keys to consistent success, emotional impulses are always misguided.
When vengeful traders get stuck in a losing mindset, every time they fail, they try to fix it immediately, relying heavily on emotionally-driven responses and responses and less on analytical or systematic thought processes. In this highly emotional state, vengeful traders lose their sense of professionalism and resort to trying to make up for their losses through the use of unthought-out force.
What a Retaliatory Deal Looks Like
An initial relatively large loss that begins or triggers a retaliatory trade. After this loss, the trader starts taking larger positions or multiple bad trades to overcome the huge loss, which only makes things worse. What could have been a single loss ended up being a catastrophic drawdown or margin call.
Know the warning signs
The most important thing for traders to know is that retaliatory trading is very common. As mentioned above, this is an emotional state that almost any trader can fall into without proper warning and avoidance.
Once aware of these pitfalls, the next thing a trader needs to do is know how to avoid them. If for some reason a trader knows about retaliatory trading but cannot avoid falling into its grasp, they need to cut their feelings off and immediately recognize an unhealthy position in their portfolio.
Let's say you're having a series of losses, you're drifting away from your daily goals, and you're really stressed. Take a step back and ask yourself "Have I entered an emotional state where I have to make up all my losses as quickly as possible?" If the answer is yes, you may have contracted revenge trader syndrome. Our professional advice is to stop everything and act fast.
If you're involved, you're probably the type of trader who doesn't admit that you can afford to lose. What you may not understand is that the market doesn't care what you're doing. Trying to succeed in the market can become a stronger urge instead of carefully following the market and making sound decisions based on what you learn.
Most importantly, your notion of trading loss is equivalent to failure. Know that taking losses according to your plan is not failure. Convince yourself that this is the right way, you can't force yourself. In case you missed it, here's a great guide on how to embrace this state of mind.
Types of transactions that occur under the influence of retaliatory trading
Not all Ethereum traders are the same, as there are multiple types of transactions that can take place in this state.
Trader who overtrades and forces himself to trade and analyze - This type of vindictive trader becomes very impulsive, without proper analysis, changes direction, and enters the same position at a different price, suffering more losses.
Hedging – In this example, a vengeful trader may be hedging a trade instead of cutting losses and trying to restructure according to a sound investment plan. We'll say it anyway -- it's a bad idea.
When traders do this, they postpone the real decision of when exactly to settle their trades. This led many traders into confusion and ultimately no recovery. At some point, you have to get out of a hedged position, and no matter where the market ends up, the losses from the initial hedge will still be there. Avoid hedging, it's not a viable option to recover losses.
Probably the most reckless of all retaliatory traders are those who hold losses and try to recoup their costs, rather than exiting at a loss - they add to their position and get a better average price, but this is A misleading tactic.
By doing this and successfully getting out of the situation, you are effectively being lied to, and it is having a detrimental effect on your career. A lot of times it works in your favor and you break even, however, it only takes one time for it to cost you a fortune.
What to do if you suffer from "Revenge Trader Syndrome"
If you realize that you are a vindictive trader, as we mentioned, first know that this is definitely not good for your portfolio.
Coach yourself not to turn yourself from a sane person into a crazy revenge dealer. This is a dangerous emotional state that will only intensify the more impulsively you fight it. Trading in an emotional state will always allow you to be abused by the market, and only a focused and rational trader can avoid being eliminated by the market.
Try to bring yourself back to a focused, analysis-based trading style. If you can't, accept your loss and stop. Remember, losing is not failing! Start over and rewrite your trading plan.
Focus on making sound decisions. If you can't, take a day off and come back later. Becoming a vengeful trader will destroy your trades.
Take a break and learn from your mistakes. Deals can fail, but that doesn't mean you're a loser. Take a step back, learn what went wrong in your trading, and write the lessons down so you don't do it again.
Identify triggers. Triggers for revenge deals vary from person to person. Acknowledge them so you don't let them control your trades.
How to Avoid Future Retaliatory Trading
As we mentioned, it is essential to understand what triggers your retaliation trading behavior. Once you have these guards in place, you need to document why you lost a trade. Remember that losing trades are inevitable and part of the trading business, so make sure you pick the right trades and remember that some trades end up losing money.
A small loss is unlikely to trigger a retaliatory trading attitude, so make sure you trade small positions so you don't become emotionally attached to a trade.
Finally, if you want to increase your position to cover losses, don't do it! Pull yourself up and get away from the computer.
in conclusion
Retaliatory trading is one of the most common destructive behaviors of traders. It is more likely after a large loss or a losing streak, causing traders to increase their position size and number of trades. All traders have probably experienced it at least once, so make sure you recognize it when it reaches you. This way, you can prevent it from damaging your account and prevent it from affecting your trading performance.
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