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Revenge trading and overtrading

Lesson 11.4 Free

Revenge trading and overtrading

After a loss it is tempting to win the money straight back. Revenge trades and overtrading break the plan when it matters most. A cooling-off rule and a daily loss limit stop a bad hour becoming a bad month.

In this lesson you learn to recognise tilt, revenge trading and overtrading in your own log, and set two rules that stop them: a cooling-off rule and a daily loss limit.

  1. 1 Tilt

    Tilt is a word borrowed from poker. It means playing badly because you are upset, usually after a loss or a run of losses.

    On tilt a trader stops asking “does this match my plan?” and starts asking “how do I get that money back?”. Signs to watch for in yourself:

    • Opening a trade within minutes of a loss, without a setup from your plan.
    • Making the next trade bigger “to make up for it”.
    • Skipping the stop, or moving it, because “this one has to work”.
    • Feeling angry at the market, or that it owes you something.

  2. 2 Revenge trading and overtrading

    A revenge trade is a trade taken to win back a loss rather than because the plan says so. It is often larger than normal, which turns one planned −1R loss into a much bigger one.

    Overtrading is taking more trades than your plan produces: trading out of boredom, trading timeframes or pairs that are not in the plan, or lowering the standard for a setup because nothing has happened today.

    Both have the same cause: the trade is serving your mood, not your plan.

    Quick check

    1. Question 1 · Multiple choice

      Which of these is overtrading?

  3. 3 A cooling-off rule

    A cooling-off rule is written into your plan before you need it. For example:

    • After two losses in a row, stop trading for the rest of the session.
    • After any rule break, close the terminal and write the journal entry before doing anything else.

    You choose the numbers. What matters is that the rule is decided while you are calm, and that it takes the decision away from the person who has just lost.

    Quick check

    1. Question 2 · Spot the mistake

      A trader's plan says: risk 0.10 lot per trade, stop after two losses in a row. Here is today's log. Which line is the mistake?

  4. 4 A daily loss limit

    A daily loss limit is the loss after which you stop for the day, whatever happens.

    Example: the account is $2,000 and the plan says 3% per day and 1% per trade.

    • Daily limit: $2,000 × 3% = $60
    • Each full loss: $2,000 × 1% = $20
    • Full losses before the limit: $60 ÷ $20 = 3

    After the third loss (or once the day’s losses reach $60) the trading day is over. Check the day’s closed results in the history panel of the terminal before every new trade.

    Open this in the terminal (opens in a new tab)

    Check your understanding

    1. Question 3 · Calculation

      Your account is $5,000. Your plan risks 1% per trade and has a daily loss limit of 2%. How many full losing trades can you take before you must stop for the day?

    2. Question 4 · Drill

      Drill: the tempting candle. Imagine you have taken two losing trades in a row today, and your plan says to stop trading for the session after two losses. EURUSD M15 is now paused after the 12:30 UTC candle on 7 August 2026: a green candle with a 45-pip body, in a market where the 20 candles before it ranged about 4 pips each. It looks like a move you could still catch. Take a trade or skip it?

      EURUSD, M15. Replay of real candles, paused after the 2026-08-07 12:30 UTC bar.

0 of 4 questions right. Answer them all to complete the lesson.