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Learn How to BOUNCE BACK After a Trading Loss

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The losses are certain in trading. You can only control your actions, trades, position size, and stop loss.

As per statistics, every trader faces a vital failure in trading at least once. 

For new traders facing the blow of a trading loss right at the origin may be very disappointing.

When you experience the loss, you distance yourself from friends and family. The pain of failure affects not only your pockets. But it also impacts your personal and mental health.

You think now I had much less than I had hardly a week ago. Your inner peace goes low. Your thoughts become unclear.

But it’s the pain that makes or breaks. A wise man said there’s a bit of hidden magic in every mistake. The magic is learning.

Yes, learning is the KEY, my friend. Each loss is a chance to learn more.

Think of the loss as a training fee for learning the lesson. The profit and loss remain part of the game. So switch your mindset and take a lesson from it.

Here are some quick tips that will help you to bounce back after a trading loss.

Practice Gratitude

Learn to be grateful. It can shift your entire frame of mind.

See, perspective is everything. Don’t get caught up in what was or what could be.

Make the most of what you have in this very time, in the breath you are currently breathing. There are many ways to practice gratitude. I prefer the Morning Gratitude journal.

One of the best ways to start your day off right is to spend a few minutes writing down the things you’re thankful for.

Think Like an Athlete

When players lose a big match, they don’t quit playing. They spend time studying their strengths and weaknesses. They speak with coaches and specialists who can help them. 

Losses can hit us out of the game, onto our backs, and leave us feeling rejected. But failures remind us that we’ve room to improve.

Make Use of Hard Stop Losses

It is the best time to make use of tight stop losses.

It will restrict not only your risk but also protect some part of your profit in a current trading position.

After you have defined your risk limit, you don’t have to worry anymore about facing another major trading blow.

Scale Down Your Position Size

Instead of risking a large amount, reduce your position size by half, at least.

Be consistent in trading small quantities. 

When the time ripe, you stand ready, work your way up, and bring back your trading size to the original.

Starting small and gaining a small position size will help you get back on track.

Stay Away From Revenge Trading

Emotional factors such as stress, fear, anxiety, and anger can force you to make big risky trades. That is revenge trading.

Don’t make this a grudge. That’s hard but don’t take it as personal. 

If you proceed with such a mindset, then it may cause more loss than before.

Thus, it is best to stay away from such a view. Instead, a better way could be to transfer the rest of your trading capital into your bank account.

Your Best Setup is Your Best Bet

The biggest mistake most traders make right after the loss they try to gain back all the funds as soon as possible.

And they start doing over-trading. But this could backfire. 

The best way to recover from massive trading loss is to trade less (for at least some time). 

And focus only on high-quality trading setups. Your best trading setup will build your confidence back.

Take A Break

Don’t run on a broken leg. Time heals everything. Pay attention to the other parts of your life that are vital to you.

Spend time with your friends and family. Invest time in things that bring happiness.

So can balance out the negative result you feel because of loss. It will take a bit to recover. So let that happen.


Be humble; all come in markets to make money. But some will win, and some won’t. You can’t always win.

Review your risk management methods. Plan your trade and Trade your plan. And take your own time to get back in the game with the experience you’ve gained.

Don’t feel depressed about loss. Don’t waste a good mistake. Learn from it.

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About the Author

Divesh Jotwani is a Full-time trader in the Indian stock market. He has spent over 20+ years researching and discovering WD Gann's methods and applying them day in and out markets.