Do not panic if you lose money in trading
Trading is a very common thing these days and many people either trade in crypto or trade in the regular stock market. The idea of trading is usually buying low and selling high or selling high and buying low. Trading is like a game and not all people grasp the concepts. Sometimes even though we are an expert, we miss and lose our money.
We should always be ready for the bad times and if we end up losing the money, we shouldn't panic. We have to remember the good times when we were able to book some profits and think that there are always good times as well as bad times. If we panic, it is not going to help, it is only going to make it even worse. But there should always be a lesson learned from the mistakes we usually make.
Trading is not always a successful game
These days we have so many bots trading in the market. With the help of the APIs the exchanges facilitate, people are able to do successful trading in the market with the help of bots. Bots take care of planning the strategy and executing them. Sometimes we might end up having loss while trading. Competing against these bots is not an easy thing unless we plan it very well. There are so many service providers out there or bot providers with whom we can also trade with bots.
I remember one of my office colleagues who wanted to do Bitcoin trading. It was about 4 years back especially when the price of Bitcoin was at its peak. He wanted to invest a lot of money but he initially tested the water with about 1200$. He entered exactly when Bitcoin was near its all-time high. There was a huge FOMO and people invested a lot. I remember this incident because that was when I exited my position and booked my profits. After that, the price of BTC started falling down and it reduced by almost 50% of its price. The colleague who invested lost 50 percent of his money. I asked him to hold but he didn't listen and he started telling everyone that BTC trading is a gamble and he would never invest again and would never recommend anyone to invest too.
So from the above incident, I understand that timing also matters when it comes to trading. If we don't trade at the right time we might end up in loss and we also need a lot of patience to stay long term. I would say that the colleague couldn't just handle the loss and he started panicking.
Losing money is very common
In any trading losing money is very common. About 6 years back when I was trading in share markets, I met an interesting friend who lived his life just trading alone. His strategy was very simple. He either does early market trading or end-of-the-day trading. Most of the time he is very successful and makes a lot of money in that. His strategy is to invest about 7000$ worth of Indian money during the start of the market. He selects a stock and invests on that and he would wait for the market to do the magic, he would wait only 15 minutes and whatever value the stock gets, he would book the profit or loss and walk out with the money.
This has been his strategy for years. I asked him how he handles his loss. I understand that not all the days would give him profits. He also said that not all the days would give him profits. But the golden words he mentioned is that we feel very happy when we get a profit but we don't have the same feeling when we lose money. He literally has no feelings in this game. Maybe it is his luck but most of the time if he calculates his earnings towards the end of the month, it is always a positive number and also a very good number.
We cannot say that this strategy would work for everyone but we have to be firm in what we are doing and find our own strategy when it comes to trading. Even if we lose our money in trading we shouldn't panic and we should invest only the money that we are ready to burn and have no hard feelings if there is a loss.
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Trading is not a child play but if you get the fundamentals right you don't have to panic because your analysis won't work all the time
It's always important that we trade with the amount of money we can afford to lose. This is because Trading is risky. As much as we would love to book profits, we should be ready to get a few loses on the way. It's also important that have an exit strategy like your second friend. So we take whatever we can out of the market and move on till the end day.
Controlling your emotions is the most difficult part of trading. It's a battle against yourself.
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I agree your friend’s golden words. Also your reccomendation: “don’t be panic ehen you loose your money.”👏🏼
People often think of trading as a "zero-sum" game, where one person's gain is another's loss. It's important to realise that it's hard to win regularly in trading, and it's very unlikely that anyone will always win. Instead of freaking out when someone else takes our money, it's better to work on getting better at our skills and plans so we can win more often in the future. This way of thinking pushes traders to keep learning and growing. Thank you for sharing your thoughts. A very insightful article.
Thanks for stopping by. Cheers!
Trading is not for everyone, I also did some trades in the past, but trading wasn't for me. so I left it and now I'm only holding coins and waiting for boom.
Yeah frequent trading doesn't suit everyone. Holding for long term is the best.
I've also seen a lot of people who come into it and say it's too easy and we're going to make a lot of profit and they end up losing all their money. I myself have made a lot of losses last year so I don't trade anymore, I just put money on them and wait for bull market.
Investing and waiting for long term is also good. But we have to understand when to stop our loss. It will also be good if we can do DCA.
Yeah dca is best.