Lost Big Money Trading? Here’s How to Recoup Trading Losses

HomeInvestingLost Big Money Trading? Here's How to Recoup Trading Losses

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Whether you didn't stick to your trading rules, let emotions run wild, nearly every trader has faced huge trading losses that has wiped them out.

Whether you didn’t stick to your trading rules, let emotions take dictate the trade, nearly every trader has faced huge trading losses that may even have wiped their trading accounts cold. What can you do to get back on your feet, and more importantly, get your head in the right mindset?

It is undeniable that humans are greatly influenced by past events. Whether it is a good memory or a sad occasion, past incidents tend to indirectly affect the behavior of traders.

In this article, we are going to explore some psychological aspects that can affect performance. You do not need to hold a doctorate degree to understand this topic, common sense is enough.

Through many studies and by observing the patterns of the trades, professionals agree there is an invisible authority that determines the actions of those who lost big. If a person is having trouble overcoming a traumatic trading loss, this article can help motivate them to recover from even the biggest trading losses. We have collected some of the most effective proven techniques that have successfully helped investors bounce back big from losses.

Accept Responsibility

This is easier said than done, at least in the trading industry. The money that has been deposited by the trader is lost yet dwells on the mind for far too long. However, this only prevents a trader from moving forward and that affects the performance and ability to plan for the next trade.


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Try to be level-headed and focus on the future. The past results cannot be changed, but you can use it as a learning experience. Think of your trading losses as a pillar that is building your foundation of trading success. Do not be negative and sulk about the past, the present is now and try to stay positive, even if it is hard.

A little known secret of legendary investors is that they never focused on their trading losses. Seriously. Even after taking a loss of millions of dollars, these people have mastered the art of remaining level headed. Over the course of time, a professional trader must roll with the punches and trading losses come with the job. Even if that means accepting responsibility for the painful memories of losing money and instead focuses their energy on how to recover those losses in the market.

Realign Focus on Your Trading Plan

After losing a few trades in a row, it’s natural to feel upset or you might become frustrated. The smart traders at Rakuten Securities always look for a future trading opportunity even after the biggest trading losses. You can too, just by crafting a simple trading strategy which will help you to find the best trade setups in order to recover your losses.

If you are a full-time trader, look for the best brokerage accounts so that you can recover your losses on a better trading platform. Forget about low-quality brokerage firms even though they might offer lucrative bonuses. Trade with the professionals to ensure a maximum profit in the trading business. Most importantly, keep yourself calm during any market conditions and don’t let a big trading loss affect your long-term plans.

Back to Practice and Building Confidence

Rebuilding your confidence will take some time, but that’s expected. Trading is predictable, in that you must expect the unexpected. You must expect unforeseen situations (like facing big trading losses). As a trader grows, they will need to have a deeper understanding of the market volatility and how the market can stay irrational longer than one can stay solvent.

Furthermore, do not put all your trust in charts and technical analysis as they can show false movements. Do not be lured to take on new trading bets by sweet talkers on subreddits like /r/investing, Stocktwits, or any other stock forums, they can scammers or traders with their own agenda.

As long as you learn to take the trading loss and move forward (but learn from your mistakes) you can get back in the game.

Back to Live Trading — Start Small

It is common to be at a low point in your life after having a disastrous loss or losing all your money. Especially for beginners in the stock market who can expect this situation to frequently occur as the new volatility is puzzling to them.

Try to get acquainted with the unpredictability in small steps, let yourself understand the concept for the first few months. Every day when analyzing the chart, start fresh and get back to the basics. If the bad trading losses are still frustrating you then it is time to take a break.

Taking breaks has been proven to improve performance when it is required and your body will let you know that it is. It can help to unwind and get your mind in the right state it needs to get back to live trading and you can start fresh.

Remember, it all depends on your mental strength to get over these trading losses and the obstacles that come with it. Accept your losses with grace and prepare for the next trade. It is never over until a trader quits the game.  

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About the author

Brian Meiggs
Brian Meiggs
Brian Meiggs is a personal finance expert, and the founder of My Millennial Guide, a personal finance site helping you put more money in your pocket. He helps millennials follow the smart money in order to increase their earning potential and start building wealth for the the future. He regularly writes about side hustles, investing, and general personal finance topics aimed to help anyone earn more, pay off debt, and reach financial freedom. He has been quoted as a top personal finance blogger in major publications including Yahoo! Finance, NASDAQ, Discover, MSN Money and more.

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