How I Deal With Sudden Huge Losses in Trading

Welcome to this video where I'm going to share with you how I deal with huge losses in trading. Because the truth is, I've had accounts liquidated overnight. Months of progress wiped out within a few hours. And I've gone through that process, truthfully, more times than I can count. Now, eventually I figured out a blueprint that allowed me to not only bounce back from all of those setbacks, but to do it in a quick way. And in this video, I'm gonna share that process with you. So just for some context, yesterday we had the biggest liquidation event in crypto in history. $19.4 billion worth of liquidations occurred in just a matter of hours. To put that into perspective, the second place was like FTX and Luna back in 2021, which saw about $1.4 billion in liquidations. And the COVID crash, about $1.2 billion in liquidations. So if you're watching this video, chances are you lost money during this period. And if you're feeling a little bit hopeless right now, wondering what your next move should be, then this video was made for you. Now I want to preface this by saying that I know how this feels. And after going through 3 full bull runs, I've been in this exact position multiple times. Caught completely blindsided by some kind of liquidation event, losing a significant amount of money. So I know how it feels. That it feels terrible right now, right? Your account might be blown, you may have gotten liquidated, and you've lost a lot of money. And you may be staring at your screen right now wondering what the heck just happened. But I'm also here to tell you that the reason that I'm still here, still trading, is because I did the exact things that I'm about to teach you in this video. These are the things that I do every single time I go through some kind of catastrophic loss. Whether it's due to a black swan event like yesterday, or just poor risk management on my end, or for any other reason. So without any further ado, let's dive right into it. But before we talk about what you should do, we need to understand one thing first: what happened yesterday will happen again. This isn't the first black swan event that's caused a massive unexpected reaction in the markets. It's not the second either. In fact, right off the top of my head right now, I could probably name at least a few black swan events that have temporarily altered the fate of countless traders and investors in the world. We've got the 2008 financial crash, you know, we've got the COVID crash, dot-com bubble, Black Monday, the Great Depression, and the list goes on. And here's the hard truth. This is not going to be the last one. There will be more events like this in the future that causes these catastrophic losses. And when the next one happens, you're going to be faced with the exact same problem that you're dealing with right now. Now, if you know how to handle it, this becomes an opportunity to, you know, take advantage of all of this pain. But if you don't, yeah, it could very well be the end of your trading career. So this video isn't just about what happened yesterday. This is really about what to do when you experience some sort of unexpected huge loss. Because the reality is it's already happened, like the damage is done, like you cannot undo it. The only thing within your control right now is what happens next. And that's what I'm going to get into, because in this moment you have 2 options. Option 1, you can make it worse through, you know, emotional decisions, you know, revenge trading, panic. Option 2, which is the only thing you can do, Is minimize the damage, learn from it, and position yourself to come back stronger. And in this video, I'm going to show you how to do the second one, obviously. And this starts with accepting what has already happened. And I know this is not what you want to hear. You're probably looking for a strategy right now that allows you to immediately make back the money. You probably want me to even tell you like exactly where the bottom is so that you can buy in and you can recover everything. But here's the hard truth. Loss has already happened. There's no time machine, or there's no sort of magic trick that undoes this damage. And the faster that you accept this, the faster you can move forward. Because right now, the only thing you can possibly do, and I know this sucks to hear because I've been here before, is damage control. Not thinking about recovery, not trying to make this all back, simply preventing this from getting worse. So what does damage control actually look like? Well, first, understand this: over the next 48 hours, you're definitely not going to find a bottom, right? The first dump is usually not the last dump. And even if it is the last dump, if you enter the market right now without any kind of process or strategy, you're not investing, you're gambling. Now, here's some more actionable advice that actually works. A, you know, wait for a very clear sign that the market is showing bullishness, right? Wait to see at least that the market structure is changing. Wait to see actual buying pressure coming into the market, because if you jump in right now early, you might think you're catching the bottom, but more likely than not, you're just catching falling knives. Price is still falling, and there's no indication that the reversal is in. You're just risking your hard-earned money just because You think or feel that you don't want to miss out on this potential bottom. And part of the reason you may be doing this, by the way, is because you simply feel the need to recover this damage right now, right? You feel like you need to take action right now. Sitting back and doing nothing while the market just does its thing, it feels painful. And that's normal, by the way. That's just a human reaction. And I'm going to show you how to solve this in just a moment. But just understand this for now, right? And this goes back to one of my favorite sayings in trading, and I say this all the time, and it's that top pickers and bottom pickers usually end up as cotton pickers because it's not the job of a trader to catch bottoms. In fact, you can be late to the party by a few months and still make more money than someone who's supposedly caught the bottom. Think about it, you know, and think about this for another moment, right? How many trades do you have to lose? How much money do you have to lose trying to catch the bottom? How many positions How many tries do you need before you actually get it right? Food for thought. Now, second, you need to understand that what's happening in your brain right now, what you're feeling right now, is something called loss aversion. And this is basically defined as how the pain of losing money is about twice as powerful as the pleasure that you get from making money. And right now, you've lost a significant sum of money. Now, it doesn't matter what the dollar amount is. What's important is that this amount matters to you, right? This is a loss that's meaningful. And because of that, your brain is currently in some sort of fight or flight mode, right? It's currently stressed the hell out and it's just desperately searching for a way to regain control. That's why you're looking at the charts right now, right? Thinking that you see the perfect setup. And that's why every fiber of your being is like screaming at you, yo, you need to enter a trade. You know, you got to make this money back. But here's what you need to understand, man. That's not analysis. It's not rooted in strategy. It's just a trauma response. Your brain is trying to soothe itself by taking action. Could be any action, because doing something feels better than doing nothing. But as we know, you know, in trading, doing nothing is often the right move, especially right now. Again, you want to make sure that you have some kind of process for deciding when you enter into You know, a trade or a position. I've given you 2 blueprints just now. One, wait for buying pressure to come back into the markets. And then 2, the second condition is to actually wait for a clear reversal signal before you enter. And trust me, I know this sounds tough to do right now, but this approach has saved me from losing thousands of thousands of dollars. I'm confident it will save you from the same because I cannot stress this enough. If you're a beginner, And that earlier message about you're not needing to catch the bottom still doesn't make sense to you. You'll learn it eventually, right? You can either take my advice here, or you can learn it the hard way sometime down the line. That choice is up to you. Now, third, and this is probably the most important thing I'm going to tell you in this video, is to not make any sort of trading decisions over the next 48 hours. I don't care how perfect the setup looks. I don't think if you think you found the bottom, I don't care if everyone on Twitter is saying, "Oh yes, generation." buying opportunity, do not trade. Here's why. Whatever you do right now will be purely based off of negative emotions— fear, desperation, anger— that need to get back at the market. And emotional trading is not a profitable strategy. It never has been, it never will be. And every single profitable trader that I know has one rule that they follow religiously after a major loss. Walk away. Give yourself time. Let the emotions settle, because the market will still be there tomorrow. The opportunities will still be there next week. But if you blow the rest of your account right now trying to revenge trade your way back, you're done. Game over. Because there is no way humanly possible that you will be able to recover that capital within a short amount of time. Revenge trading, though, will only ensure one thing, is that you completely blow up months or years of progress within a very short timeframe, just because you're trying to validate your negative emotions. That, my friend, is never worth it. But at this point, you know, you may be arguing, man, like, I have so much negative emotions right now that, you know, I have to deal with this somehow. But you're telling me not to do anything? After all, like, don't get me wrong, this is normal, because your brain is wired to do something. Anything after going through a painful moment. This is the same reason why you feel that strong urge to get back at someone if you feel that they've wronged you. But usually, and you probably are able to speak about this from experience, that immediate action that you take right after going through something emotional is rarely the most optimal action, especially once you look back at it. So what do you do instead? Well, simply give your emotions something productive to do. At the end of the day, this is just emotional energy. As long as you channel it somewhere, you're already going to feel much better. Now, the only thing that will be off-limits here is to not channel it into trading. But here are 3 things that you can probably do right now that will actually help. 1, journal. Write down what happened, what you were thinking, how you were feeling. Be brutally honest with yourself though, because Chances are your risk management was off. And personally, based off of coaching hundreds of students at this point, as well as doing this myself, here's some advice: journal this with pen and paper. There's something magical about putting those words down on paper, and I cannot tell you what magic this is, but once you're done with pen and paper, that emotional pain that you're feeling right now will go down by a lot. By the way, I ask you to do this not to beat yourself up, It's to reflect on this to ensure that you only make this mistake once. And secondly, backtest. If you cannot— like, if you absolutely cannot resist looking at a trade right now or taking trades right now, take it on backtesting, right? Same analysis, same execution, but zero real risk. This lets you channel that energy without putting more money on the line. And 3, step away completely, right? Go to the gym, you know, take a walk, call a friend. Do something that has absolutely nothing to do with trading. Just give your brain a chance to reset because in 48 hours you're going to feel completely different, right? This emotional charge that you're feeling right now, it's going to fade. Sure, you still can't magically, you know, bring back the numbers on your bank account, but at the very least, right, the market's going to look different and you'll have perspective you simply cannot have right now. Because of the feelings that you have. And now let's think about how to actually recover that money you've just lost. And I want to start this by giving you a perspective that has served me well over the years, which is that lost money can always be rebuilt. Always. You never truly fail at trading or crypto unless you quit. Now, of course, there will be setbacks. There will be blown accounts. There will be liquidations like what you're going through right now. And every single successful trader Has been through this. And every one of them has a story about the time that they lost everything and had to start over from scratch. In the case of myself, I'm sure I can speak for many others, there are more than one of these stories. In fact, too many stories like this throughout our journeys. But here's the difference between us who are still around to talk about the story, to share this, who are still, you know, trading reasonably profitably, versus everyone who's just silently quit trading altogether. It's that the ones who made it learned from it. They reflected on these mistakes, they figured out what went wrong, and they made damn sure that it never happened again. Making a mistake once or twice, it's fine. But you know, if you do it more than 3 times, at this point you're just asking for it. But ultimately, the message that I'm really just trying to share to you is that as long as you don't quit, you're never really going to lose. Now don't get me wrong, this is obviously different from that saying in crypto where Like, if you don't sell, you never lose. That's not true, by the way. But throughout my life, I can definitely say that, you know, it took me years before I was able to become remotely profitable from trading. And I had so many excuses to quit at any point in the first 2 or 3 years. But the question, I guess, at the end of the day is, you know, how much do you want this? In the event that you see trading as something that can give you all of the freedom that you hope to have in your life, then don't quit. Understand that this is just a temporary setback. And I know that it sucks, but in 6 months or in 12 months, you'll be thankful that you had this experience because this is the type of experience that's gonna shape the character that you're gonna become. And especially after going through this pain, it's gonna be a good reason not to make it, make these mistakes. Ever again, right? Now, in the event that you didn't lose money in this event though, and especially if you had proper risk management, you know, especially if you stayed in cash, if you were prepared, this is one of the biggest opportunities you'll see in this entire cycle. Because here's the thing, in every single bull run, the easiest money is made during liquidation events. Buy when everyone is getting stopped out, hold for 2 to 3 months, sell into the recovery after you get a 2-3x. That's the doohickey. But only if you have capital, and only if you have a plan, and only if you're not operating from a place of trying to recover losses. If you are trying to recover losses, this is not the opportunity for you. In fact, I'm even going to share something else that's probably going to drive the nail deeper for you right now. You losing money throughout this liquidation event has not only resulted in you losing your physical money, but it's also costing you in terms of opportunity cost. Because imagine if you had $10,000 ready to buy into this dip and the market goes up by 3x, let's say, over the next 3 months. You did not just lose the money that you just lost right now. You lost out on a potential $30,000 in profit simply because you were not prepared. You were caught off guard. So if there's one thing you do after watching this video is actually go reflect on this, actually go journal, actually go take a pen and paper. And write this down immediately. In fact, I wouldn't even blame you if you chose to click off of this video right now to do it. Because if there's one thing that I don't want you to do after watching this, is to just watch this, feel really smart for a few minutes because, you know, you spent some time consuming this information, and then do absolutely nothing about it. At the end of the day, like, I want to see you win, right? That's the reason why I'm making these videos. And if you really want to win, guess what? It's not going to happen just because you watch some videos. It's only going to happen She actually take action. So let me leave you with this, right? What's happened is done. You can't change that. The only thing that matters now is, do you make it worse? Or do you start the process of coming back stronger? And if you do, then here's what you need to do. One, accept the reality, right? It's happened. Your job now is only damage control. 2, understand your emotions. You're not thinking clearly right now. That's perfectly normal. And so you do not trade for 48 hours. This is non-negotiable. 4, redirect that emotional energy into journaling, backtesting, or just simply stepping away completely. 5, reflect on what went wrong so you never make this mistake again. And 6th, remember that this is just temporary. You haven't failed unless you quit. Black swan events are going to happen again. That's just the nature of markets. But at least now you know how to handle them, and now you know what to do next time you're caught in a catastrophic move. And that knowledge, I think that's worth more than whatever you've lost. This is my take. And by the way, if you would like my help one-on-one to install the exact systems and processes that has helped me turn $20,000 into 7 figures in trading, um, click the link in the description box below. Perhaps it might just help you bounce back just a tiny bit faster compared to what you've learned from This video link will be in the description down below. But otherwise, I'll see you in the next one. Ciao ciao.