EP.17 - Why We Make Our Worst Trades After a Loss
It’s a scenario every trader knows and fears: one loss triggers a downward spiral of terrible decisions. But why does this happen? Why do we abandon our well-crafted plans the moment we take a hit? The answer lies deep within our own psychology and brain chemistry.
In this episode, we dissect the anatomy of a losing streak. First, we expose the psychological traps that ensnare us, including the powerful urge for Revenge Trading, the distorting lens of Confirmation Bias, and the flawed logic of the Gambler's Fallacy. You'll understand why you start fighting the market instead of trading it.
Next, we dive into the science. We explain what happens inside your brain after a loss—how the stress hormone cortisol impairs your rational thinking, and how a drop in the reward chemical dopamine creates a craving for risk. You'll learn why you are, quite literally, not thinking straight after a bad trade.
Most importantly, we give you a concrete, four-step emergency plan to break the cycle and regain control. You will learn:
Why stepping away from the charts is the most critical first step.
How to use position sizing to rebuild your confidence.
How to turn your trading journal into a powerful diagnostic tool.
Why focusing on a perfect process—not profit—is the key to recovery.
A loss is only a lesson if you’re willing to learn from it. Join us to discover how to master your response to losing, protect your capital, and turn one of trading's greatest challenges into your greatest strength.
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📌 Risk Warning:
Trading financial instruments carries a high level of risk and may not be suitable for all investors. The value of investments can go down as well as up. You should never invest money you cannot afford to lose.
📌 Disclaimer:
All content provided in this podcast is for educational and informational purposes only. It does not constitute financial, investment, or trading advice. Always do your own research and consult with a licensed financial advisor before making any trading decisions.