Incidents like these happen in every trader’s life. When it happens, you are down and out – mentally, emotionally, and financially. We, at ABJ Finstocks, know that recovering from such a setback is possible. Of course, discipline, a clear plan, and a commitment to win again are important. But above all, you need a strong psychology and a winning mindset. 

Here are a few points to keep in mind when you face such a situation. 

Stop your losses from compounding
The first step in recovery is to prevent further damage. When your capital has taken a significant hit, it’s crucial to halt any more losses. Compounding losses can quickly spiral out of control. There are no shortcuts to recover your losses. Step back from trading temporarily.  Regain your composure and reassess your strategy.

Use stop losses
The stop-loss order is one of the most effective tools to protect your capital. By using stop-losses consistently, you can prevent small losses from turning into large ones. What you are actually stopping is the emotional decision-making that often leads to overtrading and more losses.

Never overtrade
Overtrading is a common pitfall for traders who are trying to recover from significant losses. With a huge loss, you will take multiple positions to recover fast, but this approach can lead to even more losses. Instead, focus on quality over quantity. Be selective with your trades, and only enter positions that align with your risk tolerance and strategy. 

Develop a strong psychology

The best way to recover from a 60% loss is to ensure it never happens again. How do you do that? Don’t leverage and don’t borrow funds to trade. Stop. Think. Analyse. Remember, there are no shortcuts to recovery. Give yourself time. Develop a strong psychology and then start. Trading is not just about making profits, but also about protecting your capital from significant drawdowns.

Get a winning mindset with ABJ Finstocks

As Research Analyst, we have seen many who face such a situation. Our experience tells us that the one who gets back on track and starts trading is the one with strong psychology. The right investment advice, the right support and in times of need the right mentoring can go a long way in helping you build a never-say-die trading mindset. 

At ABJ Finstocks, our research tells us that if you have lost 60% of your trading capital, you will need a 150% return to recover your capital. Take a look at the following table to understand the work you need to put in to recover your capital. Didn’t we tell you that there are no shortcuts!

So if you are starting your trading journey or restarting it, get in touch with us. Remember, successful trading is a marathon, not a sprint, and learning from your mistakes is the first step toward long-term success.

We are professional trading advisors at ABJ Finstocks, ready to guide you through Nifty or Bank Nifty trading, whether it’s Intraday, Swing Trading, BTST, STBT, or identifying Short-term Multibaggers. If you’re facing challenges or need expert insights, we offer complete solutions to enhance your trading and investing success. Contact us today for personalized strategies tailored to your needs.