I need a morale boost.

Until I gave the stock market a shot - starting in April, I had managed my money *incredibly well* - mostly through mutual funds and buying rather than renting. Then I decided to take 80k and put it in the market. Made a lot of classic mistakes and right now I have about 20k left (I've lost about 60k since April ). I have learned a lot of very expensive lessons, and I am determined to make up my losses within 3-5 years. Maybe that is a fatal mistake....hmm

Just wondering if I should even try to make my money back in the market. Has anyone else been down this much and had a comeback??

Biggest regret - not putting in hard stop-losses from the beginning.

I am truly stunned at my own behaviour - and my inverse-Midas touch.

rsvp,
Mike

Hi Mike,
Sorry to hear about your bone crushing losses. I think you might be able to take some comfort in the fact that pretty much everyone makes those mistakes in early trading. I know I have, and I haven't met anyone who hasn't. Losing 60k is the bad news, but the good news is that you have just laid the foundation of your trading education by taking your first losing run. Learning to trade is just one big process. I don't know where that process ends, but I know that it begins with you learning to deal with and take responsibility for your actions. Now you have something solid to lean on if you should chose to keep at it.

If you want my advice right now you should do 2 things.

1. Stop trading.
2. Get a financial education.

Best of luck to you, Shoot.

Mike.I do not think there is anyone trading who has not done the same as you,but it will be the best lesson you will ever learn about trading,losses and dealing with them.Read some books on the mindset of trading and how to look at a trade without fear,we all hate losing money and it makes us do strange things and come up with wrong decisions we would not normally take. When i started i traded everything and anything thinking this was easy money,you soon realise it is not.Wiped out account in six months,20k alot of money for me.Took a step back,stopped trading,read loads of books on Trading Psychology,money management while trading,and some good technical analysis books.I wont recommend any literature because any book on the subject always give you the same advice.What i have learnt may not make me the next Warren Buffet,it makes you look at trading longer term and helps you make decisions on fundamentals and not just a hunch.Plus i can sleep at night again.good luck.

About a year ago I’ve got my account up %75 within 5 month of trading options – only to loose it all and then some in 3 weeks.

It was a good pile of money. But, as soon as I could get over this fact, I became very grateful for the education I’ve received for my money. When anybody talks about trader’s mistakes – I know exactly what it is and why it is bad for your account – I have committed all the classic trader’s “sins” myself.

Now – no, my account is not completely restored yet. But, at this point I am convinced – it will be.

I would second: stop trading/get education. Figure out exactly what it is you did wrong and what would be a strategy for avoiding this in the future.

This seems to be working for me. But then again, as I said – I wasn’t able to recover all my losses yet…

Hey Mike,

Glad to hear from you and sorry to hear about your losses. For more stories of people's first experiences trading I also recommend checking out:

let's share our stories of our first time trading

Best Regards,
Dave

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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

hey mike,

sorry to hear about your losses. i also recommend stopping live trading. the hardest part of trading is the psychological challenge, and if you already lost a good amount of money, it will be even harder to be psychologically detached -- which means it will be harder to be successful as a trader. instead, perhaps paper trading while you refine your strategy may be a worthwhile venture. also, if you're not using technical analysis, i think that would be a key thing to learn about. the free courses on informedtrades might be useful for you.

hope that helps.

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Hi Mike,
I would 2nd Dave's recommendation of reading the "my first time trading" thread. You will find that pretty much everyone starts out losing a hunk of money, including myself. After reading it, you may not be so hard on yourself.

I believe that you may be taking the wrong approach. Your goal right now should not be trying to make the money back that you lost. That type of psycology usually leads to more losses. Some call it "revenge trading."

In my view, your best option is to start all over with the 20K you have left. Do not think of it as you are down 75%; think of it as you are starting with no wins or losses on a 20K account.

You need to change your trading style to limit your losses. The first step should be to adopt a very sound money management plan. Start with watching both Dave's and Airelon's videos on this subject. This is absolutely the best advice I can give. Let me say again- this is absolutely the best advice I can give.

You must calculate out stop loss placements, and positions sizes so that you limit your losses. Your number 1 goal should now be, and always be, to preserve your cash. Your thought pattern should not try to make money so much; you should to try and prevent from losing money. If this was a chess game, your goal right now is to protect your king, not capture the other king

20k is a decent account size. In my view, you always should limit your losses to no more than 2%. However, until you get over the psycology of blaming yourself for losing, you should cut that loss even further. I would do a few trades with a loss of no more than 1%.

Cheers
Tek