How to Overcome Losses during Market Turmoil

PS: Just to assure everyone, this is just a post to share how one can handle losses effectively. I did not blew my account. Far from it as per below screenshot =) Same for US portfolio. My system already scaling down since 3 weeks ago.

Suffering losses is part and parcel of your trading journey. If you have not made any losses, it is either you have just started trading or you are just not trading (ok fine... you are investing, for long term, that's not the point of this post). Recently, the Dow Jones Industrial Average has just tumbled almost 2000 points equivalent to 7.5% as of this writing and many traders including me has suffered some losses, especially those investing in cryptocurrencies Bitcoins. It is not easy to deal with but you do not need to be miserable or feel bitter over it.


In this post, I will talk about how I manage losses. I understand not everybody's situation is the same but I hope it will benefit you in one way or the other.

Accept that losses are part and parcel of trading
If you have traded long enough, you will see losses. it is inevitable. No one can make 100% profitable trades. Not even AI (as far as I know). If someone claims to have 100% profitable trades, it is probably a Ponzi scheme. For me, I just have to accept losses. As my strategy is based on trend following, a large part of my trades are losing trades and sometimes drawdown can be large. As long as it is still within my model, I just have to live with it.

Take it as a lesson learnt and do a strategy review if necessary
The first time I experienced heavy losses was during many years ago when I just started trading US stocks. I was investing in a pharmaceutical company that gapped down 63% in a day. I was stopped out. That was a huge loss. It was an expensive lesson learnt, I reaccessed  my strategy and move on. Now if possible my system won't buy pharmaceutical stocks. It is also good to keep a journal or some sort of report to record all the trades that you have done and the reasons behind buying/selling those trades so that you can review them or fine-tune your strategy in the future.


Shutdown your laptop and take a break
Move away from the war zone. If it is affecting your emotions, avoid staring at the screen. Being emotional may cloud your judgement which could lead to bad trading decisions. Take a break, go for a coffee or do your favourite sport. Or   my Facebook! Don't go back to your screen until you are in the right frame of mind.

Talk about it 
Well, don't bottle it up. There is nothing to be ashamed of. I'm not saying you should tell everyone your losses. Confide in your loved ones, Or post anonymously in social medias. Gather together like minded people and share with each others about your bad experiences. Pray or meditate.


In trading and investment, it is important that you are in the right frame of mind. Knowing how to control your emotions and employing a disciplined approach to trading will dramatically increase your odds for success. For me I have my automated trading system to do the job.


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