How to Avoid Revenge Trading as a Prop Trader
Balancing emotions
As a trader one needs to accept the fact that there will be days where trades will not be in a positive direction. This may result in a sudden rise of negative emotions and impact the decision making process. So the best suggestion is to take a break and come back with a fresh perspective to handle the situation.
Create a good and practical Trading Plan
As a Prop Trading Firm, we recommend having a good trading plan in place that is appropriate for your trading style and has factored in the Risk Management traits. Use the tools like Stop Loss and Take Profit levels ensuring that the financial stability of the portfolio is maintained.
Log in Small Trades
With extensive availability of choosing the trade size, it’s advisable to go in smaller lots of trades as this shall help in limiting the loss levels. Though the up side is capped it still will help you boost the confidence when you have smaller profits in your pockets. Additionally this technique will help you diversify the trades and overall use the leverage available.
Maintain a Trading Journal
This is an age old proven technique where maintaining the details of the events whether as a trader had profit or loss and a regular review will help to take more control and decision making becomes more logical. The best part about journaling is that it’s a great reflection of your trading strategy and outcomes associated with it. So you can realign the same to suit your trading style.
Take decisions based on Data Points
To beat revenge trading a sharp tool to deploy is a strategy to take any decision that is based on data points. These decisions would be based more on logical and tested data. So they will have more backing of facts and current business scenarios. Hence the outcome of these trades will be largely controlled.
Exercise, Healthy Lifestyle
Managing a healthy lifestyle and regularly exercising will help you manage stress better while trading and help make decisions better.
Keeping Knowledge Levels Updated
As a Prop Trader in this fast moving world needs to keep oneself updated with latest information on business and technology advancements. This will help you keep yourself ahead of the competition and edge over other traders.
Conclusion
Avoiding Revenge Trading in a fast paced world is not easy and requires a lot of control. A careful assessment of the trading strategies, the risk management framework and individual risk taking capacity will help a lot. Most successful traders have achieved the art of avoiding such trading habits. So even if till now you are one of the Prop Firm Traders who still are battling this area, we have your back. Please feel free to reach out to our Trading Coaches in case you need any further guidance or help. We, as a Best Prop Firm, are committed to making sure that we support our community members to strive to be successful trader.
Disclaimer: All information provided on this site is for educational purposes only, related to trading in financial markets. It is not intended as financial advice, business or investment recommendation, or as an opportunity or recommendation to trade any investment instruments. Hola Prime only provides an educational environment to traders, including tools, materials and simulated trading platforms which have data feed provided by Liquidity Providers. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local laws or regulations.