A dangerous belief in trading is that risking more recovers faster. After a losing streak or a significant drawdown, many traders feel tempted to increase their position size dramatically in an attempt to win back losses quickly. While this approach may occasionally work by sheer luck, it usually leads to deeper losses, emotional trading, and even total account wipeout.

The idea that risking more recovers faster ignores the realities of probability, risk management, and the psychological pressure that increased risk brings.

Why Traders Are Tempted to Risk More After Losses

Several emotional triggers drive traders toward this behaviour:

• Desperation: The urge to quickly erase losses leads to reckless decisions.
• Ego: Many traders want to prove they are “right” and recover their pride as much as their money.
• Impatience: Accepting a slow, steady recovery feels too painful compared to the fantasy of a quick comeback.
• Gambler’s mindset: Treating trading like betting encourages irrational risk-taking after setbacks.

However, emotional decision-making in trading almost always ends badly.

Why Risking More Usually Makes Things Worse

Increasing your risk dramatically after losses creates several serious problems:

• Higher probability of ruin: One or two bad trades with oversized positions can wipe out an entire account.
• Emotional instability: The psychological pressure of larger trades often leads to panic, hesitation, or impulsive actions.
• Compounding errors: Under stress, traders are more likely to deviate from their strategies and make poor decisions.
• Risk of blowing up: Chasing losses accelerates account destruction far more often than it accelerates recovery.

Thus, the idea that risking more recovers faster is not only wrong but actively dangerous.

The Correct Way to Recover From Losses

Successful traders recover from drawdowns carefully and methodically:

• Lower risk if necessary: Reduce risk per trade after a losing streak to regain emotional stability.
• Focus on process, not profits: Return to strict adherence to your trading plan, without trying to “make it back fast.”
• Accept gradual recovery: Understand that slow, consistent growth is the safest and most reliable way to rebuild an account.
• Review and adjust: Analyse your losing streak to identify any strategy flaws, psychological mistakes, or external factors at play.
• Stay patient: True recovery comes from patience, discipline, and resilience — not gambling.

Protecting your remaining capital is far more important than chasing lost profits.

Examples of Smart Recovery Practices

• Scaling risk cautiously: After a drawdown, risking half the usual amount per trade until confidence and performance improve.
• Reviewing setups: Only taking A-grade setups that strictly meet all criteria to ensure higher-quality trades.
• Maintaining emotional balance: Taking breaks from trading after heavy losses to reset psychologically before returning.

Each example focuses on sustainability, not emotional revenge trading.

Conclusion

It is completely false to believe that risking more recovers faster. In reality, increasing risk dramatically after losses almost always leads to deeper financial and psychological damage. True recovery in trading comes from discipline, patience, controlled risk, and a focus on process rather than desperation. Protecting your capital and rebuilding methodically ensures that you stay in the game long enough to succeed.

To master risk management and learn how to recover from losses like a professional trader, enrol in our expertly designed Trading Courses today.