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Lou Mercer on Revenge Trading

Lou Mercer discusses his thoughts on revenge trading

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The revenge trade is when we take a loss and what we try to do is make up for that loss by getting into our next position, and a lot of times it's a little bit bigger, which if that goes against you, we really get in this hole that's difficult to make up. We're not a failure; we're not a loser if we take a loss. The best traders in the world are going to take a lot of losses. What we need to do is make sure that we're keeping our losses as small as possible and letting our profits run. So the next time you take a loss, let it go. It's something that everyone's going to go through. Try not to make up that loss. That revenge trade is where you turn that little loss into a big hole that's very difficult to make up.

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Important Disclosures

Past performance is no guarantee of future results.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions.

This discussion is provided for illustrative purposes only, and should not be considered an individualized recommendation or personalized investment advice. The strategies mentioned may not be suitable for everyone. Each investor needs to review a security transaction for his or her own particular situation.

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