How to Overcome Losing Money in The Stock Market

Jordan Mendiola

Photo by Chris Liverani on Unsplash

The consensus-based on the people I’ve asked is that the stock market is where people lose money. They aren’t completely wrong. Like anything, there are winners, and there are losers. 

Patient individuals win, and impatient individuals lose. 

The stock market is a simple concept where you buy low and sell high. Unfortunately, some people get too caught up in their losses and continue to chase them to make up for their loss. 

It’s not like going to a casino and betting $1,000 on black. There are many more risk management and projections involved in the market. I’ve lost and won money in the stock market, but I’m still up 40% all-time on my initial investments.

Here’s how to overcome losing money in the stock market and gradually boosting your portfolio value.

Evaluate Why You Lost Money

It’s easy to kick and pout about losing money and give up on the stock market after a big loss. I almost quit when I took a $200 loss on a Zoom option that ended up worth $3,000 just a few days later — about $2,800 worth of margin in the trade.

Common Reasons People Lose Money

  • They don’t trust their gut and quit too early.
  • They stay in a losing position for far too long.
  • The revenge trade and try to recover losses irrationally.
  • They didn’t do their homework on the company they’re investing in.

Always make sure to do your due diligence on a company. If they’re not growing and there isn’t any reason their value would go up, then stay out. You need to know what catalysts you’re looking for to determine whether or not it’s worth your time or money. 

An exit strategy is way more important than an entry strategy. If you’re up 100% on a trade or option, it would be a great idea to take profits and leave no money on the table. You were right! Take your rewards and move on to the next opportunity. 

Hype stocks are a very tricky situation. For example, a bunch of investors hopped into a company called Nikola, another electric vehicle company. This company shot from $20 to $70 in a matter of days. Next thing you know, many bagholders are invested in a company that’s falling apart.

Only Stick to Trading a Few Companies

You don’t want to spread yourself thin and get too involved in too many different trades. This is an example of over-diversification. Focus on a few sectors and businesses you believe in. 

Manage your risk by being right once is more important than trying to be right 7 times in several different stock sectors. There’s no benefit to you if you’re trying to predict seven future movements. It’s better to go all-in on one or two trades and hope your homework pays off.

You don’t have to know everything to make good money in the markets. 

Instead, you only have to know a few things and understand them extremely well. For example, if you’re a gamer or computer wizard who understands AMD and NVIDIA extremely well, then bank off those companies instead of trying to guess which pharmaceutical company will take off next.

Know your target — There’s no point in putting your money into the markets if you don’t know what price or catalysts you're looking for. People hope and pray things go right and then end up losing their hard-earned money. 

Focus on one company at a time so that you get comfortable profiting off their success and buying the dips when they’re failing. It’s a game of ups and downs. Timing is crucial, but your due diligence is more important.

You Live to See Another Day

Do not be like investors on the WallStreetBets Reddit and risk your entire life savings on trades that are way out of your control. At that point, it becomes gambling, and you’re susceptible to paying the patient stock traders.

The stock market is not a get rich quick scheme. Otherwise, everyone would be doing it and profiting. It’s not that easy. Learning how to build wealth consistently takes time and commitment. You’re going to have to put in the hours, lose money, and learn lessons.

There will be good days, and there will be bad days. You’ve got to account for the good days and the bad. The most important thing is that your all-time investment portfolio is going up!


Investing and trading in the stock market comes with miracles and heartbreaks. Don’t try to be one or the other.

Just focus on consistent growth and be proud of your improvements over time in the long-run.

  • Evaluate your losses and do whatever it takes to avoid making those mistakes again.
  • Only stick to trading a few companies otherwise, you’re going to get overwhelmed and lose sight of your goals.
  • Don’t risk it all or “Yolo” your money because that’s gambling, and you’re more susceptible to handing your money over to someone else. 

The markets are volatile right now, be safe out there, traders.

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Creative entrepreneur, U.S. Army Engineer, and dedicated runner. Committed to sharing ideas that lead to more fulfillment in all areas of life. Email: 08.18.20 ?

Chicago, IL

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