Lesson 53 of 69
Managing emotions: fear, greed and revenge
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Emotion is not a character flaw to be eliminated — it is information about your and your expectations. If a trade is making you anxious, the position is too big or the plan was never clear.
| State | What it looks like | The fix |
|---|---|---|
| Fear | Closing winners early, skipping valid setups after a loss | Reduce size until a loss is genuinely boring; pre-set the take profit and walk away |
| Greed | Adding to a winner with no plan, moving the target further, oversizing after a win streak | Fixed 1% risk per trade, target defined before entry, no adding without written rules |
| Revenge | Re-entering immediately after a stop-out to 'get it back' | Hard rule: no new trade for 30 minutes after a loss; two losses and the day is over |
| Hope | Moving or removing the stop loss because it is 'about to turn' | Never move a stop against yourself — set it once and let it do its job |
The one rule that fixes most of it
Never move a further away. Everything else is recoverable; turning a planned 1% loss into a 15% loss is the single behaviour that ends accounts.
Losses are the cost of doing business
A strategy that wins 45% of the time with a 1:2 ratio is profitable — and it will still hand you five losses in a row regularly. Expecting streaks in advance is what stops a normal streak from becoming a spiral.
and the tilt spiral
- Losing 20% of an account requires a 25% gain to recover. Losing 50% requires 100%. Small losses are cheap; large ones are exponential.
- Set a daily loss limit (2-3%) and a weekly one (5-6%). When it hits, you are done — no exceptions and no negotiation.
- Step away from the screen physically. Tilt is a physiological state, and the reset is time, not another chart.
Practical routines that work
- Keep a with a one-line emotional note per trade. Patterns show up within twenty entries.
- Take a screenshot at entry with your reasons written on it. Fighting your own screenshot later is difficult.
- Trade the same hours every day so your baseline is stable.
- Withdraw profits periodically. A real withdrawal makes the process feel like a business rather than a scoreboard.
Key takeaways
- Fear, greed and revenge are normal — the plan is what contains them.
- A daily loss limit stops one bad hour becoming a bad month.
- FOMO leads to late entries with poor risk-to-reward; there is always another setup.
- Step away from the screen after a big win or loss before trading again.
Knowledge check
3 quick questions — your best score is saved to your progress.
1. Revenge trading is usually driven by…
2. What is a good practical circuit breaker?
3. Fear of missing out most often causes…
Progress is saved on this device.
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