50L+ losses in F&O. How to recover?

F&O
1

I am 28 years old, earning ~1.75 L INR a month. I was introduced to FnO around Feb 2023 and found Option Buying lucrative. My first two trading days resulted in a 30 K loss but I kept adding capital and in 3 months, I’d already lost 6 Lacs. Ever since then, I was always catching up with my losses, never really set any risk management and kept averaging trades.

Some days, I made 2L a day and I started to day dream about getting rick quick. One day, I lost 9 Lacs and then 3 and then it continued. By Dec 2023, I am looking at 32L loss, lost my savings and opted for loans with a monthly EMI of ~1.5 Lac.

I shared this with my close friend, she morally supported me but asked to give up on trading and focus on savings. I took a break for a couple of weeks but then pressure mounted due to EMIs and I started trading.

By mid-March 2024, I recovered 13 L and thought of moving towards Option Selling and Swing Trading. But the next day, I lost 16 L trading in BankEx options and a further 6 Lacs in the same week.

I didn’t tell anyone but found a mentor online from my home town who wanted me to learn before I can re-enter. But after a few weeks, again due to EMI pressure, I started trading without telling my mentor. I made 2-3 Lacs in Apr but lost 9L again in a single day.

Today, 29th May, I lost another 3 L and now have outstanding loans of 24L. I can’t even get any loan from any bank due to my existing EMIs. No one in my family knows this and everyone thinks I am earning a great salary and wants me to purchase a home soon.

I think I can eventually learn and be profitable in Option Trading and I want your help in getting better at it. Please, any suggestion on how I can recover from here emotionally, how can I better fix my trading setup/ strategy and how can I recover my losses would be very much appreciated!

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I am sorry you are going through a tough stage. I am also sorry that I dont know what to say.

But this is gambling addiction territory.

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Hi, can you please explain why Option Trading is similar to gambling? I mean, I see people relying on a lot of Technical Analysis - charts, strategies and indicators. Are all of these a mere myth? Please help me understand

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This is the issue, chasing Losses. The Number which keeps on nudging when you are in a trade even if you reached your Target, you keep looking for more and mare and in option buying, most of the times, what you sees will not get it.

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Here’s a good plan of action you can follow:

  • Reduce your quantity to 1. Trade with a single lot for a long time.
  • When you are able to make that small capital 10X [say, convert 1 thousand rupees into 10 thousand], increase quantity to 10 lots.
  • Now once you are able to convert 10 thousand into 1 lakh, increase quantity again. Rinse and repeat. A long way but a definite way.
  • Step up your trading timeframe. If you traded in 5 min, trade on 15 min. If you did in 15 min, now trade on 75 min.
  • Assume that you are definitely going to recover all the money and make 10x more in the next 10 years. Like money is lying in front of you to be accessible only after 10 years - given that you follow the process.
  • Know that you won’t be making sizeable profits for a decent time in future. Make peace with this.
  • So you have to pay your EMI from your salary. Switch jobs / develop a side gig, get a higher salary and lower your expectations w.r.t. making large purchases. Now different other ways to make money from market itself are also side gigs - swing trading, option selling etc. - you know what I mean.
  • Start disclosing things to your family so that burden of expectations can be lowered. Many a times a check from social circle might work to stop an addiction. This has become a drug for you and you have to stop taking it anyhow.
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Here is some harsh but much needed advice for you: QUIT OPTIONS.

It is not a tool to make money like you imagine it to be. Risk management is KEY to making money while trading and from your story, it seems like you just don’t have that skill.

If you invested this money in a bunch of Mutual funds around the same time, you would’ve made 20-30L just not in bursts. You would’ve been able to buy a house. You could’ve gotten financial security.

The fact that you say you never want to give up shows that you are an addict. YOU ARE NOT INVESTING OR TRADING - YOU ARE GAMBLING. What you do is the same as playing Dream11 but it just makes you feel smarter about yourself.

Please for the love of god and for the sake of your family - STOP FnO TRADING IF YOU ARE 50L+ IN LOSSES AND DON’T RESTART IT AGAIN.

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Hi! I understand your point of view but I lost them due to my indiscipline and flawed mindset. I want to bring in myself the discipline, put in hard work and be patient with my progress.

Please help!

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Thank you Prateek, I need to learn first before I can think of profits.

I would like to form a trading setup (strategy, entry, exit) and will stick to 1:1 RR by trading with 1 Lot.

Do you have any suggestions around the trading setup?

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If someone does give you suggestion will you then try this strategy? Talk to your family members and get some help.

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Setups and strategies are abundant on Youtube. You have to do the work of finding the one that aligns with your mindset and psychology.

Cutting to 1 lot and going to higher timeframes will give you a lot of breadth to experiment without losing money.

Gain theory → Experiment → Figure out what works → Repeat what works → Practice till you can’t get it wrong.

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You lost the game the moment you asked for something no one else knows. Your losses are significant and rapid. While you won’t recover the money quickly from anywhere else, you can slowly bounce back in the same market. Just take it slow; with time, you will eventually recover. Have your losses taught you something?

Going slow is crucial. The faster you try to recover, the more negatively the market will respond. Ten years ago, I experienced similar substantial losses, but I slowly recovered over a decade.

Time is something you should focus on, not money—whether it’s a loss or a gain. There’s always something to learn. Understand the market cycles. I thought demonetization was the worst nightmare until I witnessed COVID-19. I feared trading during COVID-19 would be disastrous, but the subsequent rally proved otherwise. No one anticipated the Himalayan heights of market rally.

So, consider your 50 lakhs as an investment. A very costly lesson! Next time you trade, go slow and with lower quantities. You’ll get through it someday.

At least take 2 to 3 years more before you put large money next time man. Never give f to anyone in the market. Bullshitters are plenty. You write down everything. Be intelligent. Don’t fear! 28? A very young punk in the market. Welcome to the club of losses. You also need a RED WINE. :smiley:

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100% myth

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@apple come on bro! Wake up!

Consider all the indicators are like a knife. You can use it for cutting a vegetables, or kill someone or kill yourself. We can also use for applying Kissan Jam on bread. So? One weapon has different uses. Similarly, One should know how to use & when? Tough question? How? :grinning: :grin: :grin: :grin: :grin: :grin:

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The fact that you think you can recover 50L in losses by being responsible shows that YOU CANNOT!

I don’t think you understand what options fundamentally are. They were invested as a form of hedging and can be used for leverage but there are a lot of other moving variables like theta and IV at play which will mess with your options in unforeseen ways.

Remember, the market is efficient and you with you 1 year of loss making experience cannot beat the hedge fund managers who’ve spent their entire lives to barely beat the market.

Risk and Reward go hand in hand. If you want any kind of high Reward, be ready for high risk- meaning more loss. Your strategy will work for a while until one day where it’ll implode and your entire portfolio will come burning down. Again!

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A person having knife has distinct advantage over one without a knife. I don’t see this in case of indicators.

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Sorry to hear about your loss bro…this amount is substantial…
Well, the bright side is a regular source of income in hand…
Bad side is the outstanding loans…
I would suggest you the following:

  1. For the time being, stop thinking about recovering your loss. At least for the time being…
    2 Focus on paying your outstanding loans first…don’t enter the market till you are debt free…some folks can suggest you to keep on doing it with small positions, but I don’t recommend that…what is going to happen is that, one fine day, market will call you, and that same instinct to recover your loss will come back, you will increase positions, and more bad things will happen…(Just my personal projection, apologies if I’m wrong)
    3 After you are debt free, try to taste the markets again…with a trading plan, fixed small position size, keeping trading journal, fixed stoplosses in system and not in mind…
    4 Promise to yourself that you will never trade with loan money or other people’s money…
    5 This current stage can be overwhelming and emotionally labile…talk to your best friend about this first…and when you feel you can break this to your family, then only do that…
    You are already in stress and family response, if a little stressor, can add more to your bucket of problems…
    This money can be recovered…but it is going to take lots of planning, patience, perseverance, intelligence and time…
    God bless you bro…may you find a good way out of this situation…
    We all are with you…
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Options isn’t called gambling, The way you handled those losses is Gambling.

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Just take a break for some weeks , Explore . Move on and forget the past. Make sure when you comeback at your trading your mind is calm. Start with 1L, set yourself a daily stoploss % and Take Profit %. In my opinion, Banknifty Index options would be better to start as Analysing it is quite good/Easy as weightage of ICICI HDFC is Higher, mostly Direction of Banknifty would be preferable on these stocks. Learn how to Read Option chain , It is one of the major part of Option Trading. All the best Buddy, I would Love to hear you back. BEFORE GIVING UP LETS TRY ONCE MORE.

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You can start by reading these similar previous topic-threads
of folks who lacked discipline,
lost significant sums in the market,
and asked for guidance in this forum after the fact.

A common theme to recovery is -

  • Stay away from the market.
  • Focus on your other “boring” source(s) of income (Salary?).
  • Work on improving health (physical, mental).
  • Remember to stay away from the market.

Talk to your family. Not random strangers on the internet like us.
Come clean to them. Face the music. Ask for their support (moral/financial).

There are no relevant details of the setup in your post
for anyone to help pinpoint the problems.
That said, it is obvious from the results that there was no proper risk-management in place.

BTW,

is this due to living a lifestyle beyond one’s means?
(lack of personal finance planning)

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ARE YOU SERIOUS!!? :exploding_head:

Why would you encourage someone
who has proven themselves incapable of self-discipline
and is already deep in loans beyond their ability to repay
to try “once more” !!??? :astonished:

With margin from what? Predatory loans from loan-sharks?
And what happens in a down-trend week when the stoploss triggers 3 days in a row and the loan-shark is calling thrice a day for repayment!!?

I guess it is easy to think “once more” when one’s own neck is NOT on the line.
Please reconsider. :cold_sweat:

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