The Lessons I Learnt from My Biggest Loss

Believe it or not!

The biggest loss of my life taught me many important lessons.

It was those days when I had not started to learn trading but was highly interested in it. And used to trade like a Novice. At that time my trading strategy was so simple - If the price is going up then buy and if it is going down then wait. I didn't know what a short trade was or any other technical analysis. And for a few months, I did make some money (Beginners Luck). But that strain of good luck didn't last long and one trade which I took with immense greed took away all my profit which I accumulated for those months and left me at breakeven.

At that period, one day my broker called me up and recommended me 3 stocks and I thought they were pros, they have huge experience and they know the market better than me. So, I bought all those stocks and within a few days, the market went down. All those stocks took my Capital down by 50%.

I was scared, didn't know what was happening, and wanted some suggestions from the broker but he never took my phone again. I was totally in shock and confused, didn't know what to do. Hence one morning I decided to reduce the pain as it was more than 55% Loss I was incurring at that time, so I cut off the position in loss. And that was the biggest Loss of my career.

Generally, traders leave the market after such a loss but somehow, I didn't. I kept on but took some lessons from this awful experience.

1. Never Buy or Sell on anybody's recommendation. Even Pro makes mistakes and it is your hard-earned money.

2. Never put all your money in one trade.

3. Always do Risk Management in all your trades.

4. Learn and then do it by yourself.

5. Start taking responsibility.

6. Before entering the trade, you must know the Exits.

7. Learn whatever you could. Just go ahead and Learn, Learn, and Learn. But do not try to learn it from YouTube as 99% of the concepts taught are incorrect. They never show real-time examples. Teaching a Pattern is easy but giving a trade in real-time is a difficult task. If the trade fails then the Mentor's Reputation is at Risk.

8. Over time, factor out the concepts that do not work or have a low success ratio. Slowly you will gather the concepts that have a higher success ratio.

9. Never hurry. You can make time, your friend and not your enemy. Success never comes in one day; it takes perseverance and hard work to gain it.

And there I started learning and tried to learn everything. Right from Indicators to Oscillators to Demand and Supply concepts to commonly found Price Action concepts to Fundamental Analysis.

After learning and practicing for so long time, now I have understood another Lesson. And this is something no one talks about in the Market.

10. What goes down always comes up provided the company has real business to do.

11. Do not trade the News.

The Stocks which I had closed at a big Loss, at that time, went down further but over these years they have come up. If somebody would have suggested me to hold these stocks, then now I would have been in a very good profit and I definitely would not have lost my Capital.

In fact, there are many different strategies for Investment trades where without closing the trade at a loss we can manage it.

Getting good suggestions in the market is very difficult. Honestly, I don't want you all to have such an experience as me. That is the one reason why I am writing this article for you. Hope this helps you in the long run.

Play Safe, and Play the Stock Market Wisely!