How To Get Back Your Huge Trading Losses

by Dilip Shaw Date: January 12, 2018

in Stock Trading

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Every trader’s journey starts with loses. Some huge, some very huge and some unbelievable loss.

But the fact is large or small everyone starts with a loss. Including me.

We all try to get back our losses trading the stock markets. Some succeed, some do not. But unfortunately only 5% traders succeed. 95% of traders remain losers for life and retire with much less money that they earned.

Some Ideas on How To Get Back Your Huge Trading Losses

Loss is a bad experience. But problems with traders is that they think 2000-3000 loss is small, but they forget that if this keeps repeating then it can go up to lakhs. Some do not even track their losses. They call me and say they lost more than 3 lakhs.

Note: Keep track of your profits and losses. This will help you to know exactly how you are faring in the business. I personally know some small-business owners who do not track their cash flow. If you do not track cash flow you will never know what is your profit or loss for the month. You should know your profit or loss down to the rupee every month.

Reasons Of Losses

Loss in trading comes from speculation, tips, over-exaggeration of a news, reading a trade in a website, experts opinion on TV channels, friends/relatives/brokers recommendation etc. Can you see one thing is missing there RESEARCH.

Most of the people take a trade based on hope like – I bought this call option because I thought that the stock will go up. The world does depend or move on your thoughts. If you are doing a business you have to know why you are doing it and what can be the result.

Another big reason of loss is not respecting the trading plan. If you have decided a plan then stock to it.

Averaging down a losing trade instead of getting out of it is another reason for loss.

We all blame it on bad luck – but read the above – where is luck involved in a loss? Why blame your luck.

99% of traders have experienced huge loss. Its not that difficult to be 1% of the traders who make money trading but first you must not live on the hope that 10% a month is possible in stock markets because you see one option or the other doubling every other day. You saw that option getting doubled only after it doubled – did you have any idea before it doubled that it will double?

Some Important Advice TO Help You Recover Your Trading Losses

Reduce Trading Size

You are losing money so what makes you think that if you increase the lot size you will recover your losses? First prove yourself that you are a good trader, then increase the lot size. If you are undisciplined, become disciplined first. In trading take the ladder to success not a lift. One fatal crash can get you out of business.

By increasing the lot size you are trading emotionally to get back your losses which can prove to be fatal

Be Very Strict With Stop Loss

Stop Loss is as important as profits. Just because you think the trade will recover it will not. Respect your stop loss else it will punish you.

I have written two articles on stop loss that you can read:
Best Ways To Keep Stop Loss For Intra Day Trading
Which One is Better Stoploss or Hedging The Position

If you fear taking a stop loss then hedge your position. You can do my course to learn some good hedging strategies. This will help you for life.

If Something Worked For You Stick With It

Many traders make profits in few trades then they think very smart of themselves and take unnecessary risk in other trades. This is a huge mistake. If you are good in some kinds of trades then stick to it. If you want to deviate then paper trade and research first. Do not hop from one trade to another because you made profit last month. Stick with your best plan until you find a better plan. Trade less but trade on only the high quality trades. Slowly increase lot size once you gain confidence.

Take Time Off To Recover

After a massive loss month its time for rest and looking back on what went wrong. Write the big mistakes on a paper and stick near your trading desk. Make sure that mistake never happens again. Do not get into the revenge trading mode – this will ensure more losses. Instead after a massive loss take some rest and study your worst trades and refine your trading strategies.

Do A Course To Learn More

My conservative option course will help you to make trading setups where no speculation is required. Its like set it and forget it and when time comes take profits out. Moreover it will help you to learn a lot of hedging methods. It is a course for people who want to keep their capital safe and are happy with a small monthly income.

If you want to do the course you can enroll here.

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About the author: Dilip Shaw I started trading stock markets since 2007. However my first 3 years were losses. Then I dedicated almost 1 year on studying, researching, paper trading options and learned a lot in that time. Since 2011 I am trading Nifty options profitably. Call me if you need any help trading options on 9051143004.