One of the first rules of day-trading is, always plan your trades. Like in warfare, you need to have an idea what your advantage is, and where your battles are going to be fought.
"Revenge trading" is what you do when you lose money, and you trade in order to try to gain back the money. It's irrational, and, as I found out, very deadly to one's P&L.
Two days ago, I was not feeling too well (no energy, stuffed nose), and decided not to trade the corn contract as per usual. However, the moment the market opened, I found the action irresistible and went straight into the market against my common sense. My trading was very conservative, and after an initial wrong trade, I more than made back my losses (inclusive of transaction costs).
Instead of stopping, however, I thought to myself "heck, there's a chance to make MORE money!", so I went in again, and promptly lost $50.
Before I knew it, I had gone in a total of 2 more times, each time trying to make back my losses, and promptly losing even more money. In fact, I had gone from being very slightly positive, to having lost my entire week's earnings. This happened so quickly that it made me sick to the bone: what had literally taken a whole week to make was gone in two trades over 20 minutes.
I can't think of a better lesson than what I experienced, to hammer in the truth that revenge trading never works. As a trader, you should never trade for the sake of trading, and you should never trade with the motivation of "making back what I lost": with this mindset, you're no longer accepting your losses but setting yourself up to lose even more.
