Getting Over A Big Trading Loss
Did you just suffer from a big trading loss? Yeah, it happens, and it happens to pretty much every day trader out there. It is something that we here at the Income Mentor Box Day Trading Academy know all too well. With that being said, getting over a big trading loss is very possible, as long as you follow these rules and tips. Let’s help you get over that big trading loss so you can get back to making money on a consistent basis!
Cut Your Trading Loss & Call It A Day
One of the biggest mistakes that newbie traders make after suffering a big trading loss is to keep trading on that same day. Now, you might think that the best idea is to keep trading so you can recoup your losses and make your money back. However, the chances of this happening on the same day as your losses are pretty slim.
The fact of the matter is that you are not going to be clear headed after such a big trading loss. You are going to be angry, rash with decision making, and you won’t be using your brain to trade. Something that we always stress is that you should never trade emotionally. Trading, whether Forex or otherwise, requires a clear head and a sound mind.
Trying to trade when you are already frustrated, after having suffered a big trading loss, is not going to be your best decision of the day. Folks, there are well over 250 weekdays in a year when you can trade. If you suffer a big trading loss, call it a day, collect your thoughts, re-evaluate your plan, and get back to it the next day. There is no need to rush head first into even bigger trading losses.
Accept Responsibility & Figure Out What Lead To The Big Trading Loss
Yes, a big part of dealing with a trading loss is to accept responsibility that it was your fault. There is no doubt about that. Sure, the market may have taken an unexpected turn, maybe you trading platform is not up to snuff, or whatever else. However, the point here is that as a trader, you need to know that you are 100% liable and at fault for losses. There is nobody to go crying to, so there’s no point in blaming anything or anybody else. When you trade, you accept the risk that there might be some big losses in store for you.
However, this is not to say that you cannot evaluate your plans and strategies after a big trading loss. Why did the trade go south? Why did you just lose so much money? Being able to take a close look at the trades you made, and exactly what went wrong, should help you avoid another big trading loss in the future.
Now, this is not to say that it won’t happen again, but if you just start trading again, without knowing why the loss happened in the first place, it most likely won’t end well all over again. Take a few trading lessons, analyze why that big loss occurred, and try to correct whatever can be corrected.
Yeah, sometimes it is all down to luck, but usually big trading losses can be attributed to mistakes, even one small mistake made along the way, and knowing that mistake was can make all the difference. Also, go back to what you know. How were you successful in the first place? Often, going back to your grass roots, what made you successful in the first place, will help you correct errors and avoid big time trading losses in the future.
Put In Some Practice Time To Avoid Another Big Trading Loss
One problem that tends to occur with most people after they suffer a big trading loss is that confidence goes right out the door. Yes, this is normal. It’s not odd if you feel unconfident after having just flushed a few grand down the toilet. Of course, everybody is going to be a bit weary after suffering a big trading loss like that.
However, the issue here is that you really cannot go back into trading if you are not feeling confident. You need to stick to your game plan, trade with your intellect, not your fears. The issue that people will end up not investing enough, holding back, missing trades, and just making bad trading decisions due to a lack of confidence.
Our advice here is that after suffering from a big trading loss, you might want to use a demo account for a few days. Just get back into the swing of things, make sure that you are winning most of your trades in the demo account, and this should get your confidence back up to the point where you should feel good trading with real money. There is absolutely no point in rushing back into big time multi-thousand dollar Forex trades if you don’t have the confidence to do it right. Just go slow and work your way back up the ladder.
Start Out Small When Getting Back Into Trading After A Big Loss
The final piece of advice that we want to give you here today in relation to recovering after a big trading loss is to start out small. Now that you have accepted responsibility, cleared your mind, re-evaluated your trading strategy, and practised on a demo account, you can get back to trading. However, do not start out big.
Start out with just a trade or two, and don’t invest too much money per trade. Don’t jump right back into it trading at the same volume you were when you suffered your huge loss. There is no point in rushing back into it. The market is not going anywhere. So just get your wits about you, get your bearings, and slowly ease back into it.
Getting Over A Big Trading Loss – Final Thoughts
Folks, as long as you follow these tips and rules, you really should not have a problem recovering from a big trading loss. Yes, it sucks, but it happens, and it happens to everybody. Suffering losses in trading is pretty much unavoidable, but it’s how you deal with them that will decide how your trading future looks.