Trading Loss How To Recover After Big loss

Trading loss in the stock market may not just impact your pocket. But can also prove to be a draining experience that makes you feel anxious.

Whether your negligence or poor luck caused the loss, it can make you feel down in the dumps. As per statistics, every trader has faced a significant decline in trading at least once.

Therefore, it is of most importance to know how to recover From Big Trading Loss when it strikes and some ways that you can follow during such a time.

For a new trader facing the blow of a trading loss right at the origin may be very discouraging. Here are some quick tips that will help you recover and bounce back after significant trading loss.


Once you have experienced a significant trading loss, consider downsizing your Position size instead of risking it big.

Cut the position size by half at least. Be consistent in trading small, and when the time is ripe, you are ready, work your way up and bring back your trading size to the original.

Starting small and winning a small position size will help you get back on track while also rebuilding your confidence.

Allow Yourself Time to Recover

It is okay, even advisable, to take some time off from trading. However, this time must be spent lingering on assessing where you went wrong in your strategy.

Review your trading plan and find answers to primary questions such as. Was there too much risk-taking? Did I plan my trade well?

That will help you get back on your feet and return as a smarter trader, who has learnt from his experiences.

Your Best Setup is Your Best Bet

One of the biggest mistakes that traders make right after experiencing the significant trading loss is to gain back all the money lost as soon as possible.

To make this possible, he trades even more than he did before. But this could backfire.

The best way to recover from enormous trading loss is to trade less and focus only on high-quality trading setups. Your best trading setup will boast of the highest win percentage along with the best risk versus reward.

Make Use of Hard Stop Losses

That is the best time to make use of hard stop losses. It will enable you to not only restrict your risk but also protect some part of your profit in a current trading position.

After you have defined your risk limit, then you will not have to worry anymore about facing another major trading blow.

Stay Away From Desperate and Revenge Trading

Psychological factors such as stress, fear, anxiety, and anger can compel you to trade bigger and riskier. That is known as revenge trading.

Revenge trading may cause more significant losses than you did. Therefore, it is best to stay away from such a strategy. Instead, a better route could be to transfer the rest of your trading capital into your bank account.

Stay Positive

Last but not least, do not let the trading loss get the better of you and try to stay calm and positive and be upbeat about your future trading plan, but also realistic at the same time. Understand and accept the fact that this could happen to any trader.

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.