If you lost money day trading, you’re not alone. Anyone who’s ever tried their hand at the stock market have tried day trading at some point in their life. Emotions are running high and there are things that you can do today to make sure that you don’t dig a deeper hole for yourself.
I know what you were thinking. You wanted to get wealthy and wanted to reach financial independence a lot sooner. So you tried your hand at day trading and found out that it’s not as easy as you were hoping. I mean, all you have to do is buy low and sell high making an easy 2% per week. How is that so hard?
So you spend money and time learning the technical indicators that tell you how day trading works. Then after months of time has passed, you ended up having a lower account balance than what you’ve started with. That’s the majority of stories of people who day trade.
I’m also included in that group of people. I day traded before which made me lose between $15,000 and $30,000 worth of money. I know the feeling because it just feels terrible. It doesn’t feel great. You don’t just lose the money, you lose the time that it took for you to make that much money in the first place.
It’s brutal when the market just does not care whether you’re losing or making money. The market is the market and it will move up or down with or without you. The important thing to do when you lost money day trading is to get your psychology back to normal and commit yourself to more profitable investing strategies.
If You Lost Money Day Trading, It’s Expected
If you’re a day trader, you will probably lose money. Day trading is NOT as simple as, “as long as I make money, and I sell when I make money, everything will work out”. There isn’t a magical technical indicator that will allow you to make money beyond your wildest dreams.
If it was that easy, there would be no employees but a ton of day traders running the economy. Even from the select few who do make money day trading, only a small percentage of them actually make meaningful money. When you day trade, it’s expected that you will lose money. If you lost money day trading, it’s normal.
It doesn’t work out as you think. You can’t just “make 2% per week, which means I’ll make 100% over the year”. It doesn’t work like that. The market is not rational and it will take your hard earned money, do whatever it wants with it, and then give you the remains afterwards.
The market can remain irrational longer than you can remain solvent. I don’t know any day trader who’ve been profitable over a year or more. I’m fairly confident that I won’t personally know any day trader who’s going to be profitable over a year or more, either.
The successful day traders that I do know online are the ones selling you a course that making money from day trading is possible. It certainly can be but for 99.99% of people, they will lose money day trading. Why would you try to be a part of the 0.01%? It doesn’t make any sense. The odds are stacked against you.
What to do After You Lose Money Day Trading
The first thing you can do is to SMASH that social share button and post to your favorite social media! Your friends could be losing money hand over fist and need their mindset changed to be geared towards investing.
But in seriousness, let’s go over what to do after you lose money day trading.
1) Stop Day Trading
Yes, Mark Cuban got successful at it. After Mark Cuban sold a prior company, he started day trading technology companies. He was actually profitable at it. However, we don’t know what his overall day trading track record actually is. Over his lifetime, he may actually be down money.
The first thing to do if you lost money day trading is to stop day trading. I know it’s tempting to look at day trading and want to “get back to even”. However, that has the greatest chance of wiping you out. As someone who’s gone through the process, I know what it feels like.
I lost so much money day trading and the time it took for me to amass that amount of money in the first place. And on top of that, I need to get back to even at some point. It’s not a profitable strategy and it won’t be a profitable strategy for 99.9% of traders.
Don’t day trade because there are other, better things to do in the meantime.
2) Do Profitable Strategies
The best investing decision you can do is to stop doing things that are losing you money and start doing things that are making you money. The S&P 500 never returned a negative result over any 20 year period. Ever. Investing over the long haul has always been a successful and profitable strategy.
The time is now. You wanted to try your hand and see if you could make it and you can’t make it. Now’s the time to get your feet wet into profitable strategies like investing over the long haul. My long term investments have generated so much money since I graduated college.
Close to six figures worth of profit. Even though 2022 was a tough market to make money in, I’m still up a lot of money since I started investing in 2016. Look towards more profitable strategies and you will be rewarded by the end. Few people have regretted investing over the long haul.
This millionaire janitor became a millionaire janitor because he invested over the long haul.
3) Take a Break
Your emotions are running the highest it’s ever been. Money is an emotional subject. If you lost money day trading, take a break and recoup your sanity. Once I decided to stop day trading, there was a big sense of relief. There was a huge burden on my shoulders that got lifted because I decided to stop day trading.
It feels like something that’s been dragging you down is no longer there. Your shoulders are heavy from burdening the loss of money. Then when you decide to just let it all go, and give up the unprofitable venture, you feel better. Take a break from it all and take a step back.
it’s going to make a world of a difference in your psyche. I still remember the day I chose to give up day trading. The big sense of relief I felt. It’s an unforgettable feeling. I put the remainder of the money that I have into the S&P 500. Long term investing certainly is less stressful and there’s less emotional highs and lows.
Taking a break helps you so much.
4) Focus on Work
Now’s the time to be indispensable to your employer. You don’t want to lose money with your investments AND lose a steady paycheck that’s going to help you stay afloat. During the coronavirus pandemic, I lost close to $100,000 with my investments and net worth.
It would have been absolutely devastating had I lost my job as well. I wouldn’t have known what to do. Even with the generous unemployment benefits. Now’s the time to buckle down and get to work. Volunteer for more work. Make sure that your boss is happy. Whatever it is, a steady paycheck does wonders for your life.
Many people who retired early at the height of the bull market in 2021 regretted their decision and decided to get back to work in 2022. If you do not like your 9-5, it’s time to change jobs and move to another company who values you more. Good companies are out there.
Plenty of People Lost Money Day Trading
You are not alone if you lost money day trading. There’s always going to be someone out there who thinks they can beat the market. Or who thinks that they can do better than anyone else who’s ever tried their hand at day trading. Many of these people will not make money.
This is just the harsh realities of the investing world. I’m included as a part of that statistic and I’ve been through the pain of losing money day trading. It’s one thing if you spent money and you got something in return for it. It’s another if you lost money day trading and got nothing in return.
You’re not the first person to lose money day trading and you won’t be the last person to do so. The important question then becomes what will you do in order to move forward from it. Many people just downright refuse to quit and they continue day trading only to lose more money.
Continuing a losing strategy is a surefire way to get wiped out. If you get wiped out, you will have to build the empire from scratch. Which isn’t the easiest thing to do. You have to know when a strategy just isn’t working and be willing to pivot to other, more profitable areas.
Then once you do, you will be remembered as the person who came out on top after losing money. Instead of as the person who was stubborn and kept doubling down on a strategy that doesn’t yield any fruit. Plenty of people lost money day trading, so there isn’t any blame there. It’s what happens next that matters.
Lost Money Day Trading? Focus on Building Wealth
Real wealth is built over years and decades. If you lost money day trading, it’s never too late to focus on building wealth. Save and invest your money and think in long terms. Instead of trading your way to wealth, invest your way to wealth. It’s easy to get wealthy over decades, it’s hard to get wealthy over a year.
You won’t regret becoming a millionaire by 35 but you will regret becoming poor by 30 through day trading. There’s a way for everyone to build real wealth. it’s not through trying out strategies in which 99.9% of people have a proven track record of failing at. It’s by committing to a strategy that plenty of people took advantage of to get rich.
Every paycheck, I invest my money in a 401k, HSA, and Roth IRA. I know I will never regret investing that money because over the long term, I expect the stock market to end up at a higher point than at a current point. The stock market is just a mechanism to transfer money from the impatient to the patient.
Patience is the reason why so many people are doing well today and why so few people are doing poorly. Delayed gratification separates so many people from each other. Richard Fuscone declared bankruptcy after becoming a multimillionaire. You don’t want to be him.
You want to be the one who builds wealth slowly but surely. Remember that there’s a janitor who became a multi millionaire but a high powered banking executive who declared bankruptcy. Risk management is a policy that so many people ignore. Nothing bad happens, until it finally does.
