Nearly every trader will suffer from a big loss or several in their career, whether it’s due to a technology fritz, a stray from your strategy and discipline, etc. How to bounce back after a big loss isn’t too complicated, it can be accomplished with a few simple steps. The most challenging part of bouncing back is repairing the damage done to your confidence and self-esteem.
After a losing streak or a big loss, you may begin to start feeling a lot of self-doubt and even questioning whether you’re capable of the trading industry. This leads to a lot of issues that many beginner traders suffer from, such as anxiety getting the best of you, and exiting out of the trade too quickly, hanging on to your trade too long, missing trades all together for fear of losing, or taking too many trades then you can handle etc. If you’ve felt any of these emotions, don’t panic, you can yourself and your trading confidence back!
Every trader has bad days when it comes to the market, so you should keep in mind you never want to let a bad day cost you more than you make on an average profitable day. You want to control the downside to the best of your ability. A big loss causes all sorts of inner conflict. After a big loss, there’s no way to trade successfully with a clear head, so there’s no shame in taking some days to clear your head and recuperate.
So, to get out of the trading funk, you have to accept some responsibility to what went wrong and explore things you could have done differently, so it doesn’t happen again. You can try things like going back to your demo account, practicing your strategy to gain confidence, you can chat with people in your trading community and see what they suggest, ask what they went through in their period of trading loss. One thing I love about The Apiary Fund is they encourage their traders to interact with each other, share opinions, tips, strategies, ask questions, etc. which is so nice, because the market is always evolving, so as traders we need to adapt along with it and need all the guidance we can get.
After you’re confident from trading your demo account for a period of time, you can get back to your funded account but I suggest starting off with a small position size and working your way back up to what you were trading. Bouncing back from a losing streak is about getting back to the basics and carrying out your strategy. The Apiary Fund has always encouraged us to utilize our demo account and I think it’s great advice for traders at any stage in their journey. I hope this helps you realize you are more than capable of trading, and just because of a big loss, that doesn’t mean a thing. If you have the determination and the drive to accomplish your trading goals, that is achievable!