Every single cryptocurrency related website has a disclaimer that more or less says Crypto is risky, be careful. Some even say only invest what you can lose. But these are words easier said than followed. Most of us and I am including myself have invested and traded crypto hoping for sky high returns. In the similar hope from get rich quick stories of others, we have borrowed capital and invested money that was either not ours or was not affordable to lose. We faced the loss we didn’t think we will.
Now please understand that while there are many smart investors out there, there is an equal or possibly more number of emotional investors. We emotional investors invest money after we have seen a possible return. We see others making money so we invest to make money. But we might have entered at the wrong time and are right now facing huge losses. This is an article for folks like them. This is a very serious article about how to cope with losses or what can you do about it.
If you are in a huge loss due to crypto prices crashing or any other investments, I have got words of advise for you, hopefully to cheer you up and encourage you to make informed choices next time.
If you are in a huge loss – Here’s what you Need to Do
Understand that Loss is not the end
Financial losses are not an end to your life. Most likely you are a young trader who has a whole life to look forward to. Everyone fails. Edison, took 200 trials to make a light bulb. Einstein was terrible at History. Failures are just learnings that teach you what not to do the next time. So learn from this time and understand what should not be done. Do not be demotivated. It is just money that you lost. Money can be earned back with hard-work. You will get it back. So remember it is not the end.
Talk to Someone Close
Most of the time we take investment decisions and when they fail we are embarrassed of ourselves. We lock ourself in. We wonder what society will think about us. But the truth is, hiding from society is not going to help. Talking to someone, it will help. Talk to you parents, your spouse, your financial advisor, your ally, your friends, anyone who you can trust. Tell them that your investment did not work out how you had hoped. Then tell them you will be careful next time. Ask them for help if you need it. It feels really good to let it out. Try it.
If you Borrowed Money to Invest, Tell them and Buy time
I borrowed money from my savings account that I had kept to fund this website and my other projects. Currently it stays empty. But many people have come upto me and said they have borrowed money from their friends and family. They are now in 50-80% loss. Guys, investments don’t always work out. If you did not tell your lenders the purpose of borrowing the money, it is time to do that now.
Come clean to whoever you owe money to. Tell them that you will pay them when you get it. They will understand if you are honest. Hiding anything will not help you or them.
Do not borrow more money to recover losses
Gamblers do that. Compulsive gambling is a disorder and it makes a person lose everything. A gambler who lost money would bet double to recover it and the chain continuous eventually leaving that person broke or in huge debts. So whatever you do, DO NOT BORROW MORE MONEY TO INVEST thinking that you will recover it in the next bull cycle.
Stop Trading, Take a short break
Looking at your holdings value plummet is psychologically traumatising. It is okay to give it a break. Stop trading. Stop trying to cut corners and settle for 1-5% profits here and there spending all day on arbitraging and following signals. These will exhaust you mentally and physically to a state where you will no longer find yourself capable of doing anything.
Calm your nerves down by forcing yourself to keep away from the market. Day trading is an addiction, and it will be hard to fight it but you can do it. Take help from someone. Delete all trading apps from your phones. Move all your exchange crypto to a private wallet and hide your private key somewhere. Do not keep any portfolio apps. Just leave everything as it is and focus on your day jobs, family and life in general. They are way more important than financial loss.
If you quit your job to be a trader, maybe start rethinking
Look, I run a website and youtube channel called Finally Jobless. I am the one who asks people to leave their jobs and follow their passion. But trading is not a passion everyone can follow. You need skills to predict the market and even then you can go horribly wrong. So if you quit your job thinking you can handle your finances well with crypto, and you are facing a loss, please consider going back to work.
Go until you find a real calling or are prepared to endure the risks of not getting a paycheque every month.
Pick up a Hobby
You know what they say, ‘Pick up a good habit to kill the bad habit’. It is true. But in our case you just lost some money to the crypto price fluctuations. If your money is gone, it is not going to come back the same route. You have to wait and word harder to earn it back. But it can wait.
For now, just relax and spend time learning something new. Read a book, paint a lake, write poetry, make videos, write letters to old friends, do anything that is more non-digital. That will help you keep focus away from the negativity in the crypto world. When the time is right, when you feel confident, get back in the investment game.
Share this article with your friends and family who has lost in the recent Crypto Crash. Tell them it is okay. If you are strong, be their Support.
Usually I end an article with suggestions to read other articles but not today. Today you can take a break from Crypto world and read one of the stories I wrote.