Every active trader takes revenge trades. The frequency varies by experience level and by the structural constraints the trader has or has not built around their process, but the impulse itself is universal. It emerges from a specific convergence of psychological factors that are nearly impossible to suppress through willpower alone: loss aversion, the need to restore a mental account balance, urgency amplified by recent pain, and the cognitive distortion that a trade taken immediately after a loss has a better chance of recovering that loss than any other trade.
None of those factors are accurate representations of reality. The market does not know or care about the previous trade. The probability that any specific setup works is not altered by the outcome of the trade that preceded it. The urgency to recover is a product of emotional pain, not of genuine opportunity. The trade that feels most compelling in the minutes after a stop-out is almost never the trade that the written strate…