The beauty of share market is that it gives you opportunity to earn irrespective of your previous losing streak. But very few people realize that and end up feeling frustrated and move away from markets. In face of losses, what you really need is to rein in your emotions, think practically and have a trading plan which will help you in securing profits and recovering your losses.
For this, you can take help of a certified investment advisor, who can guide you through the journey. We would like to share some such ideas with you which can be useful for recovering your losses in the share market:
• Accept Responsibility of Your Losses
• Stop Revenge Trading
• Take a Small Break
• Analyse Past Mistakes
• Focus on Your Goal Again
• Get Some Inspiration
• Get Back into the Game
Accepting responsibility of your own losses is the first step of the path of loss recovery. While trading in stock markets, always remember that the losses you incur are yours and yours alone. No one will be taking responsibility for your losses in the stock market and you have to accept defeat gracefully, no matter how big it is. You may blame the stock broker or your advisor for your losses. But the truth is, while taking services of any third party, you have agreed to the fact that investments are subject to market risks and no one but only you are responsible for the losses caused due to any loss in the market. Abusing your stock broker or advisor will not help you at all. Instead, you should look back an analyze what went wrong for you.
When you face losses, you should never try to recover that in one trade or in one day. A major loss cannot be earned back by a major profit or by overtrading. Usually when people face losses, they either quit the markets or trade with double intensity to recover the losses faced. Both of these practices are harmful and will definitely not help you in recovering your losses. Hence, you should stay calm and not over step your trading limits and capacities in case of losses in markets.
It does not make sense to quit trading altogether, neither does it help you if you over trade. If you have faced a major loss recently and are emotionally affected by it, then it would be wise to pause and take a break for a couple of days. A few days break from trading will help you recover from your motional state to neutrality and can help you in approaching intraday trading with a fresh mindset.
While taking a break, do consult your trading diary, which every intraday trader must maintain. Go through your past trades. Understand what went wrong in your trades. Mark the red flags where you see. Chalk out a plan on how to avoid those mistakes and you will definitely be successful the net time.
As you start intraday trading and you start making profits or losses there, it can become an exciting and adventurous journey in which you start running after big momentum in markets. While this can open up prospects of big profits, but will also place you at a risk of losing your hard earned money. In the intraday trading market, it can become easy to lose focus of your goals and trade beyond your risk appetite, which can result in losses. Avoid doing that. Always remember your limits and never overtrade. Also, never fully utilize the margin given by your trader. Completely utilizing your margin is also like spending money you do not have. Never indulge in it and always use a percentage of your margin to trade.
Encouragement to start trading again can come from some of the richest people on Earth who earned through stock markets. After having faced losses, remember why you started trading in the markets in the first place. It could be to invest your money or to earn a regular income. Whatever had been your objective, bring it in front of you and do not lose its sight.
At the end, everyday in intraday trading is a new day and markets give opportunity to everyone to earn money. Remember, till the time the stock exchanges are working in India, people investing in stock markets will continue to earn money. There is no point in sitting on the sidelines and watching the game when you can be a part of the game and make money for yourself. Do not turn your back to trading due to a one-time loss. With a proper plan, you can succeed again.
Never forget, having a strong come back plan is extremely important. Profits and losses are a part of stock market trading and the best part of a trader’s intraday trading journey is the optimism and hope which enters the trader’s mind when profits happen after a loss. You should trade in the markets for that profit which you earn after the loss, as it comes not just with monetary benefit, but also with experience if a trader analyzes it properly.
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