How to quickly recoup losses?
1. Accept losses, focus on reasons and growth
Psychological adjustment:
Losses are a norm of investing, there is no need to blame oneself or the environment. The key is to maintain fighting spirit and avoid a collapsed mindset that affects subsequent operations.
View losses as learning opportunities, analyze the reasons for losses (such as wrong timing, incorrect choice of targets, emotional trading, etc.).
Enhance cognition:
Cognition determines the profit ceiling. Deeply study market logic, trend analysis, and learn to make independent judgments instead of blindly trusting 'big names' or news.
Action suggestions:
Record the detailed reasons for each loss (time, target, decision basis), summarize patterns.
Learn about fundamental, technical, and macro trend analysis to improve the understanding of the market's inherent logic.
2. Preserve capital, adapt flexibly
Iron rule: Capital first:
Capital is the foundation of investing; preserving capital allows waiting for the next opportunity.
Immediately retreat when the situation is unfavorable, to avoid shallow traps becoming deep traps. Sunk costs (invested funds) should not affect decision-making.
Avoid the trap of deep traps:
Do not stubbornly hold on due to 'reluctance' or fantasizing about 'recouping losses.' When the situation is not right, decisively cut losses.
Action suggestions:
Set stop-losses (e.g., 10%-15% loss), and strictly enforce them.
Regularly review positions, evaluate the fundamentals and trends of targets, and decisively switch positions if the direction is wrong.
Maintain cash flow, leaving enough liquidity to seize the next opportunity.
3. Fix the barn after the sheep are lost, take proactive action
Take the initiative:
After being deeply trapped, do not passively hold on; instead, actively adjust strategies to follow the trend.
Holding on is only suitable for situations where 'entry timing was wrong' and the trend is still positive. If the target or direction is wrong, decisively change.
Go with the trend:
Investing is like water; it requires 'adapt to situations, change to succeed.' Adjust strategies flexibly according to market changes, rather than waiting idly.
Action suggestions:
Pay attention to market signals (such as trading volume, macro policies, capital flow), and judge trend turning points.
Build positions in batches to reduce risk. When confirming a bottom, first test with light positions, then increase as the trend becomes clear.
Avoid emotional trading (such as chasing highs because 'just sold and it rose,' or cutting losses because 'just bought and it fell').
