How to Handle and Grow from a Big Loss

Have you ever taken a big hit? I mean, a huge loss? If you have, and a lot of people haven't, they don't really have the skill sets to be able to integrate and use that particular hit to become a better trader. What they do is they get traumatized. What we want to do is take a look and say what actually goes on here. At first, it's like a gut punch. You just get socked in the gut and it fills all over your body. You feel that pit. You feel everything exploding and going down. You know, all of a sudden, congruently, anger shows up, desperation shows up, powerlessness shows up, shame shows up, all that stuff. And besides that, you become in the trauma, what happens is you actually have what is known as acute stress syndrome of where you try to trade again. And what happens is that there is a memory that triggers and suddenly you find yourself really freaking out, trying to get in trades, panicking, just going nuts. That's the gut punch. Now, how are you going to deal with it? Well, there's a few things you need to know before we actually address how you deal with something like that. The first is that your primitive brain, the emotional brain, also what I call the caveman brain, has a couple of directives, instincts that are unavoidable and that if you don't know how to deal with, you're going to get really smashed up. And the big one that very few traders really understand is the way the emotional brain, caveman, sees winning and losing. And the way your thinking brain sees it, your thinking brain has a logic to it that says, yeah, you're going to take losses and stuff like that. Yeah, you follow your plan, blah, blah, blah, blah, until you don't. That's because the emotional brain takes over. And to the emotional brain, it doesn't know about money. It doesn't. It can't conceive of money. But what it can conceive of is power. The power to be safe, the power to control outcome, the power to predict, and the power not to lose. Because understand, to your caveman ancestors, losing wasn't about money. It was about being somebody's lunch. And the one thing that you don't want to do is be somebody's lunch. That's anti survival. So one of the routes that happens with people who have problems with taking huge losses is that they see that trade going against them, then they start getting panicking, they start going, throwing good money after bad, and before you know it, what happens is they've thrown everything, they are fighting for their lives, literally. To the caveman, that taking a bigger and bigger loss is fighting a saber toothed cat. That's what it's like, friends. That's what's happening in your caveman brain, in your social mammalian brain and your limbic system. It doesn't see the loss of money. It sees the loss of life. And no, it doesn't want to lose. It's going to do anything. It's going to fight to the bitter end.

Hence the catastrophic loss. That's what it's like for cavemen. That's what you need to know. And that need to control outcome, that need to win for prestige. Yeah. What do you think winning a lot of money is like? You make, it makes you feel good, it makes you have prestige now. But the thing is, is that we don't clue into the emotional grain saying, oh, if that's challenge, if it's threatened, then I become. I become a bunking bronco in a burning barn. Yeah. Now that's the deal. You need to have understood before you. Before you started trading and could lose large sums of money. Now let's talk about first aid. It's hit. The gut punch is there, it's gone. Okay, what you do right then, if you were to check yourself out, you would discover that you're not breathing, you're holding your breath or you're panning. You are literally in fight flight and you are doomed. And you just go down. You feel that gut in yourself. That right there immediately has to be done. Something about what I teach is diaphragmatic breathing, where you start realizing, okay, biology and emotion are one and the same. And emotion is an aspect of your biology. And because it is biological, breathing and muscle tension are both part of an emotion. So right there, when the gut punch is happening and you're keeling over and stuff like that, you kind of line up like this kind of like a yoga thing, and you start breathing diaphragmatically air into belly, expand to chest hold, release slowly. You do that minimally for 15 minutes, but more like about an hour, depending on how big that loss is and how traumatized you are. What that's doing, that's stopping the emotion becoming a freight train and blowing past you and doing all sorts of more stupid things.

Because diaphragmatic breathing is associated with calm states. What you're doing is you're forcing the body into a calmer state. Now you may have to do that for a very long time. And that's okay. That's the first piece, though. The second thing we really need to take a look at this winning and losing business. Nobody wants to lose. Oh, I don't want to lose. I hate losing. Yet to be a very successful trader, you're going to have to be an exquisitely good loser. And here you are, not wanting to take a loss, and you begin to see a trading need there. But it's something really deep down. What has to happen, though, is that you're going to have to tease apart your sense of winning and saying, oh, man, I really matter when I win. I make money. I feel powerful from losing, where you think, oh, I'm less than, I'm less than. I'm not worth a darn, because that's really where you're going. So we've got first aid, but then what we're really also looking at is this loss is really the triggering of a grieving process. The first thing in grieving is shock. That's that gut punch. That's all that. That is shock. You go, this can't have happened. How did this happen? Shock. And as you go through that, what comes beyond that? It's a kind of a bargaining, where you start saying, well, I did this and I do this. I can make my money back. I can do this. I can do all sorts of things. You're really just gambling at this moment. You're no longer in control, your faculties. So you've gotten there. And then comes, guess what? Anger. Somebody causes pain, I'm gonna get them back. That's how you end up revenge, trading. You get angry and trade from anger. That got you into a problem. But now what happens is say, okay, that's one way. The other route is overconfidence of where you're doing. You know something? I make money. I feel good. I'm gonna win. I'm gonna win. No trader I know, I teach, I should say, is taught to think, I'm gonna make money today. You're already doing something that you cannot control. You do not control whether or not you win or lose. You control the mind you bring into the moment of performance. And what's happened here, by focusing on winning and not losing, you set yourself up for a big fall. That's what's happened. So now you've gone through your anger, and then what happens to that anger then becomes sadness. You know, it's gone, the money's gone. How do you tell your loved ones? How do you. How do you. How do you stand before the group of people that you hang out with? How do you do that? You feel the shame.

Now, that sadness and Shame become an enormously big, huge thing. Shame is actually an emotion that says the way you're currently organized is not working for the good of the whole. You need to reorganize. And what shame does is it starts the ante up by disorganizing the self. And when you feel that gut punch, that's disorganization. Brain hates it. It panics. So the first thing is you're going, oh, you mean shame is not about me being a character fall. I'm not good enough, a victim, I'll never make it, blah, blah, blah. No, it is an emotion that organizes the sense of self. It's powerful, and nobody really wants to deal with it. That's why the tragic thing of avoiding the shame prolongs the problem. Sadness, that very viable part of of the grieving process. You're sitting there and you're recognizing.

That'S dead, it's gone, and you have to move on. Most people don't want to move on. They want the world to change rather than for them to change and to move on and become something more. In my work, what we're doing is you're saying, okay, and that sadness. I'm actually acknowledging I'm sad. Yeah, Positivity only works so far. This is really about probability. And we're saying, how are we going to use the sadness from that loss to reconstruct a new traitor? And that's when you go, use the shame and recognize, no, it's not about you being a character flaw. It's about.

Disorganizing the self you are and reorganizing it anew so that you move and move into the future as a new person. For instance, a number of years ago, I had lost a lot of money in a divorce, and I was going to California, and I was gonna be starting a new business. I was doing this, and I was gonna make all that money back.

I didn't particularly like the business, but I was into money. I wanted to make the money. And what happened, new wife in tow with me, is that I ended up blowing a couple million dollars. And it really hurt. We were below financial, and I was just really ashamed of myself. And I actually told my wife that I know you're gonna leave me because I'm not the man that I purported to you. I felt shame. I felt horrible. I felt like I was. I was a fraud. And she got really angry at me, and she didn't get angry about me, about losing all that stuff. She got angry at me because I actually thought that her love for Me was about money rather than her love for me. Out of that and understand we're talking deep shame. Out of that, I began the process of being the human being that you see now today. It wasn't easy. I had to retool myself completely. I had to reorganize myself completely to become a therapist and later self development guy. Working with traders. That all happened okay because shame was used highly effectively to rebuild itself. So here we're talking about the gut punch. We're talking about the grieving process and how you manage the discomfort and not letting it override you with breath and muscle relaxation. And then we're actually doing the hard work of acknowledging the separation between your performances, which you can do something about and learn and your being. You discover you have inherent worth. That whether or not you win or lose.

You'Re still inherently worthy.

That is the foundation of the new trader. And welcome at one time, I hope you will actually say that. To welcome that loss is to discover that nothing defines you by your performances. It's all about your being. Okay? You always have that. You're always worthy as a human being. That's been in the genetic code since we became K people. So now you've got to separate performance.

Okay. From who I am as a human being. Then you start building that and say, now it's really about the performance. Money doesn't define me. That's the big deal. What defines me is my inherent worth, friends. That's how you start moving through this. Building a new self. If I can help you, let me know. Let's talk.