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.
You Can Read More On My Site
Learn To Trade Options To Make Monthly IncomeLearn to trade options in such a way that you make money irrespective of Nifty direction. It does not matter where Nifty goes - up or down or stays there - you will still make money. It takes 10 minutes to trade in a day. Details of the course can be found here.
Dilip Shaw, Founder
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Please note that I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.