Lost few lakhs in trading. How to recover the loss? Please help

#1

I trade stock market and lost lakhs in the last 3 months. Have the attitude of not giving up and took loan from friends/relatives and lost that money too. Now, i cannot face them and hence not going out for any party/functions. How do i recover this loss? Please help.

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#2

I can relate to this, I was in a similar situation way back in 2005!

In the first place, you need to communicate this to your friends and relatives before its too late.This is a much better thing to do than trying to recover losses. S*** happens and everyone messes up in some aspect of their life. 

I'd also advice you to take a break and forget trading for a while. Use this time to retrospect what went wrong and most importantly try and answer to yourself if trading is right for you.

If you still feel trading is meant for you, invest your time in learning and developing yourself as a trader. 

Good luck and I hope you find your calling.

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#3

Please bear with me on this long and honest post. I made a very relevant post elsewhere few months ago and would like to post it again here as an answer to your question. I exactly know what you are going through but a hard look on oneself is necessary.

First and foremost, congratulate yourself for being brutally honest with yourself. As they say, awareness is the first step to change.

You need to ask some questions to yourself..please don't answer them here. But just answer it to yourselves.

1. Why did you borrow money from your friends to recover your trading losses? What was the necessity?

2. Why do you want to come back to trading again?

I would like to share some pointers here. They might not be coherent enough and thoughts could flow from here and there. If i have a magical syringe to infiltrate these pointers in to your brain, i would gladly do so. But, please understand that my intention is to genuinely help.

1. Taking ownership of losses - No one is responsible for our losses except us. Not the market, not the system, not the people who gave us the money to trade. We have to realize that we were wrong, we had taken too much risk, and we were employing trading methods that did not work. Period. No point in blaming outside "manipulators" of markets or bad luck; We, as traders, need to accept that we have completely and utterly made a hash of things (really no choice..this is not the luxury we can afford). In a job scenario, we can blame others and get away with it but not in trading.

2. Stop trading right away - a trader might not like to hear it but this is absolutely necessary. Take the time to process what had happened, figure out what was done wrong, and make radical changes in the approach to markets.Jumping from one system to another will not cut it. Optimizing the system based on last 6 month of mkt performance would not cut it. Just a small time-based break would soothe off the mind a bit..Most of the times, this should be enough to come back as a different trader.

3. Refocus and relearn - Use the time away from trading to work on other aspects of your life and career. Create alternate streams of income so that one doesn't depend on trading income alone. 'Depending on trading income' in the initial stages of trading is probably the biggest sin in trading.

Trader should try to focus on building the self-image with other aspects of life not just with trading.In doing that, he can remain opportunity-focused and not regret-focused. Please stay focused on what you could control, not on what you couldn't;

4. See the setback as an opportunity to bounce back - I am sure the loss was very painful .Make sure that you would never go through such an episode again. Try to create a new balance between trading and the rest of your life so that you would never be dependent upon trading results for your happiness and fulfillment.

5. Handling depression - a trader need to figure out how to handle depression..more so, a losing trader. It is better to handle it heads on than brushing the episode aside and continuing to lose money in a state of denial.

Depressed feelings are a normal response to loss: the loss of money, the loss of dreams. Sometimes you have to go through that loss before you can come out the other side as a different person, one who has learned from the experience. So, please stay positive.

6. Get out of need to make money mindset - If a trader gets attached to the need to trade and make money--and once his perfectionist voice of "I should have bought there" and "I should have sold here" in hindsight kicks in --he is no longer grounded in markets. It's when those frustrations build over time, becoming self-reinforcing, that traders lose discipline and focus and eventually perish. Mental rehearsals would help in these cases. By staying physically relaxed in one's breathing and posture and by mentally rehearsing a mindset in which it is OK to miss moves--there will always be future opportunity--traders can prevent many of these train wrecks.

7. Trading too large for our account size -

Swing in the equity curve almost always is proportional to the negative effect on trader's psyche. Higher the swing, higher the negative effect on pysche and the vice-versa.

When we trade size that is too large for our account size, we subject ourselves to drastic swings in P/L, and that subjects us to drastic swings in mood. In turn, we then make trading mistakes that bring a negative expectancy to each trade, and the size eventually blows us up.

As they say, in trading, if we create drama in your returns, we'll create trauma--and that's how trading careers end.

8. Understand failure - Knowing the worst-case outcome if this trade happens to fail can reduce the fear inflicted by a previous failure from an unseen event. Black swan events aren’t common, so it’s not reasonable to fear them every time you approach a setup. Weigh the potential for loss, and if it’s outweighed by the potential for gain, the probabilities are favorable enough to participate.

9. Psychologically, it's healthy to experience defeat and then overcome it. - It strengthens you to battle back and win. If you lose the wrong way--by taking so much risk that you can't come back for the day, week, month, or year--you rob yourself of the victory that could be yours by going from red to green.

10. Make a choice to move forward - All of us have the ability to choose, whether it’s our career or our spouse or our attitude. Maybe your fear somehow gives you comfort right now, because it’s been a habit you’ve allowed. That won’t cut it though, so it’s time to change. Eventually, you either decide to get back on the right path, or you’re completely done trading. Make your choice and get on with it—and don’t look back.

Hope it helps.

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#4

Dont worry… It common. There is no trader who has come up without making loss.

Take a break relax study the markets learn strategies than START WITH SMALL CAPITAL untill u make consistant income.

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#5

Nice that you have accepted to introspect. Tradingqna forum has very good answers on this as many of us have expressed our hearts openly. Please search tradingqna forum with keywords like trading, loser, help needed, mentally fit,books,successful trader, stock tips,guidance,living out of trading,technical analysis.

1 Like
#6

shrav

all i could say is sh** happens … it happened with me too during the initial 3-4 months when i also lost some money …and then out of frustration i asked a few questions on this blog and i did get a few suggestions which changed my trading completely… i took one month off and analyzed my trading strategies and i found many faults … so i dedicated a month to just reading a few books n not trading and then made a few strategies and entered the market again…

firstly stop trading, if you have a trading journal then study your mistakes (as they say trading is a game of mistakes where losers make many mistakes and winners make less mistakes)…

secondly mention/explain your strategy and your mistakes in this forum …(believe me people will help u improve)…

do u plan your trades before entering them like risk to reward , position size ,scale in or scale out,stop loss , profit target, …

thirdly educate yourself…go through price action books by al brooks , mark douglas for psychology…

lastly when you make a trading plan then stop scalping and start swinging your trades and when you start trading again start small ,no big trades …slowly u will recover what u lost …

“A mistake is when you don’t follow your rules. If you don’t have rules in trading, everything you do is a mistake.” van tharp

“Never revenge for your losses in share market. It will get you killed.” - Benjamin Lee

A sensible trader never risks more than 2% of his equity on any one trade. - Alexander Elder

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#7

I suggest you should do paper trading on virtual money for sometime, until you get a grasp that you are doing things in a better way.

Virtual Trading sites like

  • NSE Paathshaala
  • plus.omsesys.com
  • Moneybhai
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#8

If you loss in trading , so sorry to say that there is no way to recover from it, It may be happen due to blind trust on others, or get best suggestion for investment. For recover your money you need to invest in low amount and don’t hurry, think and check the market then invest.

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#9

You are same as lakhs of people who traded and lost their hard earned money or the borrowed money. Thats the way almost everyone starts and loose. So no need to feel anything bad/guilty.

As same as thinking about how to come back, think of the persons who lended money to you. It is important. If you don’t care about their money, they will start behaving different. So promise yourself you are here to first resolve their issues than your issues.

Plan for a monthly slow payback idea in which you can slowly start paying very small amount to them monthly and if you follow this idea, you will be settling the money borrowed in just 3 years. I am sure that there is no good way around than this. Don’t think of that you can learn, trade and earn in bulk and give them their money after 6 months or 1 year in full settlement. Thats not going to happen. If you make such promise, the time will go as always, then the committed time will come, they will ask money, you will be able to only ask further time and they will talk with you differently then.

Second thing, start learning stock market trading methods, psychology required to become successful etc everyday for next 1 to 2 years. I wish you to make money from third year onwards. So start spending 2 years at least to learn everything. This is where you will come to know everything about trading. In such 2 years, do not trade anything in big size. Trade with 10 thousand and always try to protect that capital and the profits will follow without your conscious. Your job is to find the trades in which your capital is safe and leave the rest to the markets job.

As because you are not dependent to payback the money by planning and paying in small segments each month and also trading without any big account size, in the end of 2 years, if you do think trading is just not for you, then you can walk away as nothing happens.

In this process, you are not going to understand just the markets, you are going to understand some real important secrets about yourself. As Les brown says, you are not common breed, you can do anything, you have to trust it, work on it until the dreams become possible.

Invest your time in this three videos which may become best investment of your life time.

  1. https://www.youtube.com/watch?v=KlUMrzwmbyo

  2. https://www.youtube.com/watch?v=1tdihe-eBLk

  3. https://www.youtube.com/watch?v=3kRbnLhfF4o

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#10

Do few things......

1. Go to some hill station or any favorite destination, (ALONE) , change your environment and think about your mistakes, alternative options, other business and think as much as possible.

2. Be calm and see the beauty of the environment. Make your mind relax and be prepared for the upcoming challenges. 

3. if you decide(may be) to trade again, then dont dont dont touch the terminal or software immediately

4. calculate the total amount left with safe hand, this is because if you face loss again, then it will not effect your life.

5. start studying rather coding. Be a smart trader not a smart coder.

6 mark out mistake that you have done previously.

7. learn learn learn as much as possible.

8. open terminal and get your paper and pen ready

9 buy/sell stocks on paper not on real terminal.

10. Dont lie with yourself, because your best friend is you only.

11 practice on paper till you gain confidence

12 divide the safe amount to the minimum lot.

13 Trade with the lowest lot and with lowest profit/loss margin

14. keep practicing till you get the overview idea in 15-30 days where you stand.

15. get your result as report card ad analyze yourself.

16. if you gain, then you are going in positive direction, if you loose, immediately quit trading, as its not the best platform for you. Its harsh reality but its the truth.

Never shy to take help with seniors...as they are experienced and have adequate knowledge than you :-)

Best of luck :-)

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#11

There is no options to recover the money from the options, but you have to investment safely and when you are investing keep patience.

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#12

EVERY THING BOILS DOWN TO SIMPLE LOGIC " DO YOU HAVE FOOL PROOF STRATEGY FOR TRADING WHERE YOU GET AT LEAST 70 % WINNING TRADE " ( IF SOMEONE SAYS THEIR IS NO SUCH STRATEGY  THEY ARE EITHER NOT STUDIED THINGS PROPERLY OR DO NOT HAVE LOGICAL MIND BECAUSE THEIR ARE CONSTANT AND CONSISTENCE WINNERS IN ZERODHA 60 DAYS CHALLENGE WHICH PROVES HAVING PROPER STRATEGY IS MATTER OF HARD WORK AND ANALYSIS .

EVEN THOUGH I AM MILLIONER I NEVER GOT INTO STOCK'S BUT SINCE PAST 6 MONTHS I HAVE STARTED TO STUDY THINGS FOR 15 HOURS A DAY AND AM GOING TO DEDICATE MY LIFE TO TRADING AND INVESTING IN STOCKS HENCEFORTH ...EVEN THOUGH I CAN INVEST NOT LAKH'S BUT CORERS OF RUPEES ..I ANALYZED THAT BY JUST INVESTING 10000 AND LOSING 3500 THAT IF YOU DO NOT HAVE TIME TESTED STRATEGY IN TRADING STOCKS IT IS BETTER TO STAY AWAY FORM TRADING .....AN ADVISE AS A FRIEND ...THE PERSON WHO MAKES PROFIT IS LOOKING AT THE SAME CHART THAT YOU ARE LOOKING ..SO WHY IS HE WINNING AND YOU ARE LOOSING ?  ITS MATTER OF KNOWLEDGE AND HOW YOU IMPLEMENT IT ...YOU CAN EASILY RECOVER THE MONEY THAT YOU HAVE LOST VIA INVESTING IN THE SAME GAME ..MONEY IS JUST BY PRODUCT NEVER FOCUS ON IT , IT WILL COME TO YOU ANYWAYS FOCUS ON HAVE RIGHT STRATEGY ..AS Gordon Gekko " “Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies and cuts through to the essence of the evolutionary spirit.” BUT THEIR IS ANOTHER LOGIC " GREED TO GRAVE​ " NOWONDER Gordon Gekko LANDED IN JAIL . BUT AS STEVE JOBS SAYS " THERE IS ALWAYS BETTER WAYS TO DO THINGS​ " no wonder apple is one of the biggest corporations in the world . STEVE JOBS DID NOT FOCUS ON REVENUE AND MONEY BUT FOCSED ON BUILDING WORLD CLASS PRODUCT WHICH SELLS LIKE HOT CAKE ..AND REVENUE FOLLOWS ....BEST OF LUCK FOR YOUR FUTURE ENDEVORS ....

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#13

R U WITH THE CHEAPEST BROKER?

HAVE U EVER CALCULATED BREAK-EVENS BEFORE TRADING?

DO U HAVE THE MINIMAL POSSIBLE BREAKEVEN?

DO U APPLY STOPLOSS IN EACH N EVERY TRADE?

DO U HAVE A STATERGY AND IS IT TESTED ENOUGH BY U BEFORE GOING LIVE?

HAVE U PROVED URSELF PROFITABLE ON PAPER TRADING BEFORE ACTUAL TRADING?

I M SURE UR ANSWER TO MOST (I GUESS ALL!!!) OF THE ABOVE QUESTIONS ARE A BIG NNNNNNNNNNNNOOOOOOOOOOOOOOOOOOOOO.

DO ALL THESE N BE A WINNER----GOD BLESS YOU!!!

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#14

I prefer stocks of tatamotors, tatasteel, SBIN, ICICIBANK, VEDL.

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#15

Intraday trading is safe bet when we have a reliable strategy. On the other hand positional trading is almost gambling.

For truely 2D & 3D integrated trading techniques feel free to download 100% free professional intraday trading strategies here : http://intradaytradingsecrets.blogspot.in/

#16

Did not expect this overwhelming/quality responses here. Thanks Nithin for this wonderful initiative. You have no idea how much it is useful to wannabe traders like me :slight_smile:

#17

Hi Sharav, please go through this video for an insight on intraday trading in indian stocks. Go through the whole video. Some occassional intermittent editing issues are there. You might get the model used by the author at the end of the video. https://youtu.be/jcyrJ1nYABs

#18

sir, can you please advice on how your are doing as a trader now? I am in the same boat as you were on October 2014. Please advice. Thanks.

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#19

sir, can you please advice on how your are doing as a trader now after 2 years of your loss? I am now in the same boat as you were on October 2014. Please advice. Thanks.

#20

Thanks for the reply Karthik. I am already in a trading break. It definitely helps to see it from a ‘spectator’ perspective :slight_smile: