Hi john:

Sorry to hear about your losses. I am sure every trader have suffered big losses at one point or another.

I see that you have received a lot of good advice and support

I am just starting myself and have already been up and down almost 25 % a couple of times.

The one thing I learned is that It is very easy to get caught up on the wrong side of the market and then think that you are going to ride it out. However most of the time the market keeps going against you as if it knows about you and as if you are the only trader outhere.

Trading is hard on your mind. that is the reason you need a system to get in and out. I have learned this like most people the hard way.

Do not rush to get back into trading right away. take your time and get away from trading for a few days.

A lot of smart and successful people have lost everything and started all over again. Money comes and goes and you are able to recover if you can learn from your experience.

Good luck and god ble

Ok John, A little tough love.

Without looking at the chart. I don't think it matters what stock it is. I think you need to sell it. Free yourself from this nightmare. Having gone through many ups and downs throughout my 15 years of trading for a living I think that's all you can do. There is no law that says you can't buy it back at another time. Of course after this experience I think you should stay far away from this etf.

 Losing money in my opinion is like the death of a loved one so you need to have a mourning period. It's a deep loss and you need time to heal your wounds. You have no idea how relieved you'll feel until after you sell it, a big burden will be lifted off your shoulders. You need to sit back and look at what you have left and not what you had. You must not jump into anything else until you get your confidence back. Then you have to buy only in small amounts like 100 shares.

I'll say one more thing that doesn't make me feel better either in this crazy world we live in and that's... You're not alone. I know people who during the tech bubble that lost millions. As a matter of fact I may lose millions if I can't get financing for my development.

I'm sorry if this sounds rough but you did ask what you should do now. So, this is what I think. And, in the future if you need some hand holding don't hesitate, just ask.

John -- everyone has already said so many sympathetic and wise things to you -- I just want to say one more thing to you -- whatever you end up doing with the FAZ now, don't trade trying to make up the loss.  It will hurt your trading.  Wait until you can come back to trading just in the present, not thinking about making big gains to offset losses, knowing that the goal is to trade well, not make money, and if you trade well you'll make money. 

And I know how it feels.  Money hits you right in the gut  

Sorry to hear it John, but it happens. 

I started trading seriously in 1999.  And John, I gotta tell you, I was real good.  I was a genius. I had over a 500 percent gain that year.

My high point was on my birthday in March 2000.  By 2003 I had lost over 80 percent! Sure busted my bubble.  I am happy to say my ego never recovered, and I am better off without it.

Since then I am very risk averse.  I don't like to hold overnight.  I set my stops very tight and I miss a lot of good moves, but I make steady money. 

There are only two things to loose in the market, . . .  capital and opportunity.

There will always be opportunities as long as there are markets but loss of capital is permanent. (You can make new money but don't even consider trying to take a bigger risk get even.)

You will get lots of good advice from people that know more than me, but if you will allow me just a couple thoughts.

***Ask yourself only one question about your current holdings.  Would I buy them again at the price they are now?  If the answer is no, then sell.

***This too shall pass.  I remember that tight ache in my chest but that is only a memory now.

***Give yourself a little time and understand what happened.  Learn from it.

***When you get to the end of yourself you are at the beginning of wisdom.

My very best wishes.

John - it took a lot of courage for you to post that;  that alone tells me you have it in you to focus and simplify and build-back-up your account, one base hit at a time.

HERE IS SOME FRESH PERSPECTIVE FOR YOU:  I'm not making this up, this is for real:  2 of my best friends from school fell in love and got married a year after graduation.  She got pregnant and they celebrated.  2 months later she found out she had the worst kind of breast cancer.  She had a beautiful, healthy baby.  And 4 months after that she died.

Any losses in our account are under OUR control, unlike the other losses in Life that can truly wipe us out.  Treat your account with the respect you deserve, like a precious baby, you take care of it and don't let harm come its way, by using a Stop.  With a Stop...  you are purchasing a guarantee that you will never feel this anguish again.

We've all been there.  Good luck.

We have all been there, heads up.

Hi John,

Sorry to hear about your losses. I think that some people on this blog (I know a few) has lost at some point almost all of their portfolio while they learned some big important lesson. (Think of it as very expensive tuition). Something I'd suggest doing is to sit back and think about what you've learned in the process. Many people in your situation go into "break even mode" where they throw caution to the wind even more in an attempt to gain back what they've lost, but that rarely turns out well. (Remember, you haven't lost everything yet. Don't make that mistake.) You might also want to adopt a few rules for yourself to avoid situations like this in the future. Three rules that I always use when trading these markets (leveraged ETFs especially) are these:

(1) I never hold leveraged ETFs overnight. Some people can, but I've found that I do quite well intraday without the overnight terrors. Doesn't work for me emotionally.

(2) ALWAYS use a stop loss. If you can't decide on a stop when you enter your position, will it be any easier when your stock is dropping? (You're finding that it's a nearly impossible decision now. Been there!) I'm sure that a well-placed stop would have prevented you from getting into this situation. It's difficult to lose everything when you're stopped out early.

(3) NEVER develop a bias in your trading. I've lost big money in the past thinking that the market should do this or that. But the market couldn't care less what you or I think. So don't anticipate - participate!

I have to use rules and systems, because when it comes to predicting what the markets will do, I ABSOLUTELY SUCK! In fact, I challenge anyone here to show a worse record of predicting what the market will do than me. But I've learned to make money by using systems, letting my profits run, and cutting my losses short with stops. There's lots of good information on this site about how to do that, and people here are willing to help.

Again, very sorry to hear about your losses. Try to use this opportunity to learn as much as you can. I'm sure it's no fun at this point, but you'll never learn principles better than when you're pondering them in the wake of catastrophic losses. One day in the future I'm sure you'll be quite successful, and you'll have one heck of a story to tell. You've got a good attitude. Good luck!

John, Sorry to hear about your horrible losses. I would be in a totally miserable state of mind. I had some nasty losses this year in my "conserative, bond, income account that I try to leave to that broker and not get nuts about"  -- haha! -- Little did I know I would have been much better off putting the whole thing in my "crazy daytrading" account. Anyway IMHO the most important thing you'll need to do at this point is stop trading till you can do some analysis as to why those losses happened. The worst thing is to continue trading off balance trying to "get even" with the market. Study risk and money management -- these are more important than any stock picking method. Take the time to do your homework and research including backtesting. Write out your rules and trading plan. Study the experiences of successful traders. When ready paper trade till it seems clear you are on the right track. Then trade very small size (use a broker with low commish like IB and trade maybe $500. positions for a while -- if you can't make them work why would you want to trade larger?). Take your time and be kind and supportive to yourself along the way -- you are learning a very difficult career -- if it was easy everyone would stay at home and trade. Anyways -- just my 2 cents. Best wishes.

John,

Sorry about this news ...  Thinking about your question ...  I cannot answer it for you but only offer some ideas.

# 1  Your down 75% on the trade currently if your numbers are correct.  ($40 to $10)  Based on the math if your numbers are correct you own 5,000 shares currently

# 1A - Is the trade held outright or on margin (I assume with that loss size your not on margin)  If you are on margin I personally would lower that risk.

# 2 If you have the stock for less than 12 months then the loss is ST loss therefore you can only write off 3K on taxes.  ( I know from experence this year)

# 3 What is your goal from $ 10?  (Personally I see it hard to make back 75% so you must decide how much your going to lose)

I have almost blown out an account but stopped in time ... Now slowly building it back up.  It will take time and will take year to build it back up.   I'm doing better by using a business trading plan.   I would try that going forward and good luck