how to recover losses in options trading

“How to recover losses in options trading?” is a common question for many new and intermediate traders. The question is more relevant to big losses in trading, as many people put big money in line expecting to make big profits overnight. This article will explain seven practical ways to recover losses in options trading.

How to Recover Losses in Options Trading: Take a Break

Losing a big money in Options trading can drive you deeply frustrated, and you are not the only one. The first few years in every trader's life is the most painful phase. If you manage to at least keep your capital low within this time, you are lucky. However, most people feel overwhelmed, and put in line big capital out of high expectations. It is not the right mindset for a trader. Experts have an entirely different way of seeing the market. 

If you have already lost a big capital, and feeling down, and depressed, you must completely detach yourself from trading for at least a month. Next, be kind to yourself, and do everything that makes you happy mentally.

Most importantly, leave no space to think of trading during this time. After thoroughly enjoying your vacation, and being entirely rejuvenated, you can start introspecting about what you want from trading and where you went wrong. You must try to think as practically as possible. 

How to Recover Losses in Options Trading: Don't Take Loans

I know the feeling of losing a big money will prick your mind every minute, but try to ignore it in some ways, perhaps by keeping yourself engrossed in other works or going out for a walk. One question that can help you is if you want to make a comeback and be an expert trader. I know the loss can make you feel that the market is totally manipulated, and there is no hope for small retail traders but that's not true.

You can succeed in the market if you believe you can and have the knowledge. One thing you must avoid is talking about your recent loss with your friends and relatives. Of course, you can share it with someone close who understands you. The whole point is to leave no space for anyone to influence you as it might frustrate you.

Most importantly, you must not take loans at any cost, expecting to trade and recover quickly from the losses. Trading with loan money at such a phase will leave you with no hope and break you down entirely if you lose this money. Many people have experienced it, and it's certainly not the right thing to do.

How to Recover Losses in Options Trading: Don't Expect a Quick Recovery

If you are reading this post expecting a quick loss recovery, you can stop reading it at once since there is no such thing like quick loss recovery. The right approach would be to tell yourself that you are starting from scratch, and this will prepare your mind to concentrate more on the process than expecting wonders. It starts with understanding your expectations from the market.

Next, you must find your trading style, and favorable trading timings. Two popular trading sessions in India are 9:15 am to 10:30 am and 1:30 pm to 3:15 pm. Besides, you may consider trading types like BTST or Swing trading. 

How to Recover Losses in Options Trading: Chart Reading & Find One Good Technical Setup

After you find your trading style, you must spend more time reading the chart, and find out what works and what doesn't. For chart reading, you must analyze the price on 1D and 15m timeframes using price-action elements like Trendlines, Demand and Supply zones, Overbought and Oversold levels, Support and Resistance, and Pullbacks.

Besides, you may consider some price patterns like Cup and Handle, Head and Shoulders, and Double Tops and Double Bottoms. Further, you can experiment with candlestick patterns like Pin Bar, and Bullish Engulfing. 

Once you spend many hours and days analyzing the chart, and experimenting with the various tools and indicators, you will certainly find a good technical setup to count on. However, once you find an effective trading setup, it's important to stick to it, and have no second setup.

Most experts trade using simple setups. Hence, don't make things unnecessarily complicated for yourself. Besides, you must not clutter your chart with too many levels and doing this, you can cut down on confusions.

How to Recover Losses in Options Trading: Have the Best Money Management for Yourself

Finding an effective trading setup is not enough, and you need to combine it with the power of money management. Sometimes even the worst trading setups work for some traders since they have a good money management system. Hence, you must work on your money management plan before trading. 

In Money Management, you determine your daily profit and loss, maximum number of trades per day, Risk and Reward ratio, and Stop Losses, and Targets per trade. Once you have your Money Management plan ready, you must follow it religiously, and it will help you keep your losses small, and have more profits for yourself.

You may also like to read How to Set Targets in Options Trading

How to Recover Losses in Options Trading: Work on Mental Stability

Mental Stability is highly required in trading, as traders need to be emotionally stable and not enter positions or overtrade out of excitement or frustrations. Hence, doing 10 minutes of meditation before your trading session is always good. There will be winning days and losing days; sometimes, losing days may last longer.

However, it's important to look at it from the money management perspective, and as long as you can follow your money management, you must take yourself as a winner even if your stop losses are hit. The day you violate your money management, you are not trading up to the mark for sure.


No one like making big losses, but many new traders make losses out of greed. One crucial thing to understand is that small losses can be easily recovered with disciplined trading while big losses will take more time and patience.

After making a big loss, you can't afford to make more mistakes like trying to recover your losses by trading with some loan money. You can concentrate on the process more than desperately wanting to recover your losses; as the process gets better, you will certainly be able to recover your losses in next few years. 

How to Recover Losses in Options Trading: FAQs

I've incurred losses in options trading. What should be my first step to recover these losses?

The first step is to assess the reasons for your losses. Analyze your trading strategy, risk management, and the specific trades that led to losses. Understanding what went wrong is crucial for making informed decisions going forward.

Can I recover all my losses quickly in options trading?

While it's possible to recover losses in options trading, it's important to be realistic. Recovering losses may take time, and there's no guaranteed quick fix. It depends on various factors, including your trading skills, market conditions, and the extent of your losses.

Should I double down on my losing options positions to recover losses?

Doubling down (averaging down) can increase your risk. It may work in some cases, but it can also amplify losses if the market continues against your position. It's generally advisable to avoid this strategy without a well-thought-out plan.

How can I improve my options trading strategy to recover losses?

Start by revisiting your strategy. Consider diversifying your trades, using risk management tools like stop-loss orders, and focusing on high-probability setups. Continuously educate yourself and learn from your past mistakes.

Can I use options strategies like spreads or covered calls to recover losses?

Yes, options strategies like spreads or covered calls can be used to manage risk and potentially recover losses. These strategies offer limited risk exposure and can help you generate consistent income while mitigating losses.

Are there any success stories of traders recovering from significant options trading losses?

Yes, there are success stories, but they often involve traders who learned from their mistakes, adjusted their strategies, and persevered. Recovery success depends on your dedication, learning from losses, and adapting to market conditions.

Remember that options trading involves substantial risk, and there are no guarantees of recovery. Always trade with caution, conduct thorough research, and seek professional advice if needed.

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