In simple terms
Revenge trading is the attempt to recover a loss immediately with new trades that abandon the established setup, size, or risk limits. “Revenge” is slang; the market is not a personal opponent.
Planned re-entry or deviation
A second entry after a stop may be part of the strategy. Compare its predefined trigger, time since the prior order, new size, cumulative risk, and daily-loss limit. An immediate re-entry alone does not prove anger or revenge trading.
Outcome does not decide the label
An unplanned recovery trade can profit and still violate the process; a valid re-entry can lose. The full Revenge trading entry covers the broader cycle. The documentary question is what authorized the order before the loss occurred.
Sources
- CME Group, Trading Strategies in Your Trade Plan — Calls for explicit entry, exit, and risk criteria before a trade.
- CME Group, Risk Management and Your Trade Plan — Includes leverage, maximum trade loss, and maximum day loss in the plan.