Things might not be always favorable to you. The market doesn’t really take sides. You may be winning today but it’s going to happen all the time. You have to accept that one day, you will lose and it’s fine. To avoid incurring more losses when this happens, you need to do some things to save your money.
In this post, I’d like to share with you the things I usually do to avoid incurring more losses. I find these things effective and I’d like you to learn from these strategies.
When you’re trading
To avoid incurring more losses, you have to assess your boundaries. What’s your limit? Can you sacrifice more to recover? If you think you can’t lose more, stop trading for a while. Take a break and save money. Come back when you’re ready. Don’t push yourself too hard just to recover from your losses fast. Remember that recovery takes time. You need to be aware of what made you lose. Is it the market? Is it your trading strategies? You need to find the answers to those questions before you resume trading. Avoid incurring more losses by knowing your limits.
When you’re running a business
You can also lose money when you’re running a business. Just like trading, your business is not always on the safe side. During the first couple of your years, you will lose more than what you expected especially if you don’t have experience running your own company yet. It’s normal. And, for you to avoid incurring losses further, try to save up emergency funds for your business. Use these funds whenever you are on the verge of bankruptcy or other events that might make your business fall down. Avoid getting more loans if you haven’t paid the outstanding ones. You have to manage your finances well if you really want to save your business.
When you’re investing
By now, you should know that investing and trading are two different things. When you’re investing, your investment is not entirely safe. What does this mean? It means that you can win and lose. You might win today but we don’t know what tomorrow holds. The stock, crypto, and forex markets don’t assure you of anything good. There are always two options: either you win or lose. So, to avoid incurring losses, don’t go all in. Diversify your investments. Don’t put all your eggs in one basket.
Feel the regrets but don’t let them affect you
If you haven’t read my previous blog, I’ll tell you about regret trading here, which is applicable to all types of trading or investing. Regret trading is what some investors do when they want to recover from their losses quickly. This is not true. Regret trading will only make you lose more. You should know better than anyone else that your emotions should not influence your strategies. Feel the regrets but don’t let them affect you. This is the best advice I can give you.