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Psychology

Revenge Trading

Entering a trade primarily to recover a prior loss rather than on independent merits. The first link in the tilt cascade. Powered by loss aversion (the pain of the loss demands recovery) and sunk cost (I'm already down, I have to get it back). Prevention: the walk-away trigger fires on this pattern.

See also
Psychology Tilt The state in which emotional arousal degrades decision quality below the trader's actual skill floor (Tendler and Carter, The Mental Game of Poker). After a loss, the amygdala spikes, cortisol releases, and prefrontal cortex activity is suppressed. The trader is not running their best setup — they are running a distressed nervous system. → Psychology Loss Aversion The empirical finding that losses feel approximately twice as painful as equivalent gains feel pleasurable (Kahneman and Tversky, 1979). The engine behind the disposition effect. Structurally incompatible with memecoin trading, which requires cutting many losers fast to afford the rare large winner. → Psychology Walk-Away Trigger A pre-defined condition that forces physical removal from the trading environment. Examples: hitting the max-daily-loss cap, three losing trades in a row, tilt symptoms (rushed clicking, 'just one more'), trading at 3am, or trading in an emotionally dysregulated state. Must be pre-committed and non-negotiable. →
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