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What Marianna Recommends To Handle Big Losses

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Written by Timothy Sykes
Updated 11/28/2022 6 min read

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No one can avoid large losses.

It happens to every trader at some point, myself included.

Our natural reaction is to sweep it under the rug…bury it deep and forget about it.

I wouldn’t recommend that.

Like repressed emotions, ignoring large losses will eventually come back to haunt you.

Believe it or not, rarely do major losses come out of nowhere.

The most common cause is staring right at you in the mirror.

Now, the first time you take a major hit, it can be scary.

That’s why I like to share the story Mariana told at our Traders Conference.

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Marianna is probably the most consistent trader amongst my students that hit the million-dollar mark.

She’s so process-driven that she didn’t make any trades her first year.

All she did was study.

So, when she took her largest loss, $90,000, in one day, it threw her for a loop.

Since then, she’s bounced back wonderfully and then some.

I previously wrote about the lessons she took from the loss.

But when she spoke at the conference, she offered insights into how she handled the loss WHILE she was in the trade.

This is incredibly insightful because it gives you a blueprint into the mind.

And trust me, in the heat of a losing trade, it helps to know what to expect.

Plus, the suggestions Marianna provided can help anyone break through the fog of war and take action to limit your losses.

Here’s what she said.

Emotional Takeover

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Humans hate to lose.

In fact, we fear losing more than we love winning.

So, when you end up in a trade that’s becoming a massive loser, most people panic.

Now, you might assume that would make you quit the trade right then and there.

In reality, we tend to freeze up, especially when it’s a new situation.

These are some of the tweets Marianna posted during the trade:

A conservative trader, Marianna wasn’t very familiar with the situation.

Sure, she’d taken losses before, but never one like this.

In retrospect, she attributes the loss to breaking her process, stepping into unfamiliar territory, and not doing it gradually.

But in the moment, it was all about the same thought we all face…

What do I do?

Which is why Mariana came up with a few suggestions.

When in Doubt, Close it Out

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Occam’s Razor – the simplest solution is often the best.

Cut the trade and walk away.

Once we’re out of our comfort zone, our minds aren’t in the right place to make good decisions.

It’s like trying to drive in a snowstorm after a bad breakup.

Your risk of doing something rash increases.

I always tell my students to lose small and fast.

This not only keeps losses to a minimum but protects you from ending up in situations like Mariana faced.

And trust me, she’s not alone.

I’ve taken my eye off the ball plenty of times over the years, and it’s cost me.

That’s why I love this piece of advice.

It’s not easy to do, especially when your emotions start to take over.

One way to help avoid that is to practice losing.

I know that sounds weird.

However, if you learn to exit trades with simulated funds or tiny amounts in play, you engrain the habits into your mind, so they’re there when you need them the most.

Don’t Rationalize

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We’re all guilty of this one.

You’re in a losing trade and start to think about how to restructure it or explain why it needs just a little more time.

That’s not how it works.

So ask yourself the following questions:

  • Is your setup broken?
  • Is this your trading style?
  • Do I have too much at risk?
  • Do I feel like I want to vomit?
  • Would I normally take this trade?

If you answer ‘yes’ to any of these questions, then you shouldn’t be in the trade.

Trading isn’t always comfortable. But you never want to get so anxious you can’t think straight.

Take Two Steps Back

Sometimes we can’t convince ourselves to just walk away from a trade.

So, why not take a small step to get there?

When you can’t decide what to do, take a step back, turn your head away from the computer, and journal for a few minutes.

Write down what you’re feeling, what’s happening…anything that helps you focus for just a moment.

This isn’t about writing your memoir. It’s about mentally breaking away from the trade, even for a moment.

Stay Positive

tim sykes and mariana $1 million trading milestone
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Like many of my students, Mariana has a wonderful attitude.

She enjoys trading and always wants to become better.

We all make mistakes.

You don’t have to atone for the losses right then and there.

There are always more trades around the corner.

You can and will bounce back from the trade.

We’ve all been there.

So give yourself a break.

You can do this.


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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”