A few months ago I tried to guide the trader who lost over $ 12 million during a flash crash. Only a small part of the account left.
Here is a shortcut of my advice that I gave him – it may be useful to someone.
First of all, you should rest to take a distance. You are currently under the influence of shock caused by sudden loss. Just rest.
I do not accept the explanation that the reason was the flash crash. I rather see that the reason was too much capital involvement at the trade. This element should be understood and improved in your strategy. In other word –reduce the exposure to risk.
So, analyze the last 20 trades. Are they comply with your system?
Show your system to someone – someone who will check it and provide a glance from the side.
Look at the size of the trades – are they not too high in relation to capital? In my opinion, there were definitely a lot too high.
Such a loss happens even to the best traders. And the best are the best because they cope with everything that happened in their way. Also with great losses. They learned from experience and returned to the market more cautious, richer in experience and stronger.