How did you break even and recouped big losses? Please share your stories!

#1

Hello everyone,

I am a budding trader and investor. I am starting this thread because I am in need of guidance and inspiration.

I am currently down 33%. I realized the mistakes I made and have been improving my trading style and strategy accordingly.

I’d like it if the veteran and new traders alike can share their stories on recouping the losses. How did you lose your capital? What mistakes you made? What you learned? How did you improve your game? How long did it take you to break even?

Thank you.

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#2

Some of the biggest mistakes committed by me while trading were

Over trading
Averaging loosing trade
Closing the profitable trade early
Not closing the loosing trade, hoping for
recovery

Now I have minimise my mistake and there has been considerable improvement in my trading.

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#3

Another big mistake I was doing on bank nifty weekly expiry was to try to make s one big trade during expiry.
I have lost lot of money trading on expiry.now I am very selective on trading on expiry

#4

Absolutely right bro, I agree. These are the most common psychological mistakes…

#5

I have been guilty of the same mistakes. We read about them in books but following theory and doing it in real life are two different things. Could you share how you recouped your loss or how you plan to?

#6

[quote=“Minimalist, post:5, topic:52421”]
I identified my biggest mistakes in trading as not to close the loosing trade. instead I had the habit of averaging it… some times it had worked for me . Now I close the loosing trade.

Once my trade was profitable I was too eager to close it as I didn’t wanted the profitable to end in loosing trade. I have seen many times the profit would have been higher if I had waited for some more time.

I have almost stopped taking hero or zero trade on bank nifty weekly expiry. I had lost most of the money on expiry.

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#7

I think that the most important aspect is the phychological one. I know that you will try to recoup your losses and this will result in over-trading. You need to remain calm and do the trading do the talking. I hope that you will recover majority of the losses. Just don’t do anything harsh.

#8

Those are called timing the market. No one can do that.

#9

@Minimalist I think it would help if you described exactly what you are trading & your style/strategy of trading. I think forum members here would then have an idea about how best to recoup losses.

General tips would be to avoid revenge trading & trying to recoup losses quickly. Instead, probably trade with lesser capital & thus reduce your risk. & recoup bit by bit. Just give in to the fact that it is going to take time.

It’s a bit like how cricketers approach a situation where they have been asked to follow on. Most will say how they do not think about the score at all, at least initially. Rather they think of surviving session by session, ball by ball. Once they make it to the next drinks break, they re-assess.

You could also consider stopping trading altogether at the moment. Currently, markets are fairly volatile. So you could just decide to wait until a proper bull run starts across the world. That could be a month later… or maybe a year later. No one knows. But when that does happen, your chances will improve greatly, because during such phases practically everything fires.

PS - I’m not a trader, but a gambler in the stock market, So take my advice with a pinch of salt.

#10

Following has helped me, after my earlier loss.

1 - I trade in futures and have decided at any given time ONLY 2 trades should be opened simultaneously. I remove all orders once 2 trades are active. Important thing being sticking with what I’ve decided.

2 - As Mark Douglas says “Edge is everything”. Once I have decided which price I want to enter; come what may I don’t change the price.

3 and most important - I remove stocks from my watchlist. That way my decision don’t get influenced.

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#11

Bump! for more input.

#12

I think you haven’t mentioned your strategy that made loss. If you are a long time investor in good quality stocks, don’t worry your losses will be gone if you wait.

If you made loss in trading fno, I suggest you should paper trade or trade with minimal amount until you make consistent profits

#13

In FY 2016-17, it was almost breakeven for me and in FY 2017-18 I made a huge loss trading and ended the year in negative. So I sat down and analyzed my Profit & Loss statement to see where I was making mistakes. Here is what I found out and the actions I took:

  1. The losses due to transaction costs (including STT, CTT, Stamp duty etc.) was more than my losses due to actual trading. Hence I switched completely over to positional trading from intraday trading to reduce the number of trades taken.

  2. I saw that most of my losses came from trading in the more volatile Equity F&O segment as compared to the Commodity segment. So, I moved completely to trading in only the Commodity segment.

  3. In Commodity segment, I diversified more to include metals, energy as well as agri-commodities sectors. This helped with a smoother returns curve and more reliable profits.

The net result of taking the above actions was that in FY 2018-19, I recovered my entire past losses and ended up making more than that in net profits.

Let us know your findings after analyzing your own PnL statements. Wish you all the best.

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#14

Loss is the reality and a bitter reality as well. I lost in teh beginning of my career due to my hurried behavior. I learnt the things quicklya nd now I am living a life of my choice on the base of my trading skills. I am running a firm where I train traders. You can be me!