How to Stay Confident When the Market Corrects Heavily

Imagine you’re watching the market like a hawk, and suddenly, prices nosedive. Your heart skips a beat. Should you sell everything? Should you buy more? Should you shut your laptop, pretend it never happened, and pour yourself a drink?

Every trader has been there.

The stock market doesn’t move in a straight line. It rises, falls, and sometimes drops like a rock off a cliff. But here’s the difference between a confident trader and a panicked trader: one trusts their system, and the other lets emotions take over.

So, how do you keep your cool and turn market drops into an opportunity to strengthen your trading mindset? That’s exactly what we’re about to cover.

Expect Corrections—They’re Normal

Let’s start with a fundamental truth: sharp market corrections are not the end of the world. They happen regularly, and seasoned traders expect them.

History tells us that market crashes are part of the game:

• The 1987 Black Monday crash saw the Dow Jones drop 22% in a single day.
• The 2008 Global Financial Crisis erased trillions from global markets.
• The COVID-19 crash in 2020 saw markets plummet before bouncing back stronger than ever.

In every case, the market eventually recovered and surged higher. If you panic and sell at the bottom, you lock in your losses and miss the rebound.

Instead, embrace market downturns as part of the process and prepare for them before they happen.

Your Emotions Are a Research Tool, Not a Trading Strategy

Feeling fear or anxiety when markets drop is normal. But here’s the trick: use those emotions to your advantage.

Instead of reacting impulsively:

• Ask why you’re feeling uncertain.
• Analyze whether you actually have a trading edge or if your strategy has gaps.
• Review your historical backtesting—does your system account for these downturns?

Emotions aren’t the enemy; acting on them is. Fear signals where your confidence is weak, so use it to refine your system and mindset.

“The market rewards those who train themselves to do that which is unnatural and uncomfortable and punishes those desiring certainty, safety, and security.”
— Richard Weissman

Trade With a Plan (So You Don’t Have to Think in the Moment)

When a market crash happens, thinking is your worst enemy. Your brain will scream at you to take action, even when doing nothing is the right move.

That’s why you need a written trading plan that spells out:
✅ Your Entry & Exit Rules – No guessing. No second-guessing.
✅ Your Stop Loss Strategy – So you know exactly when to cut losses.
✅ Your Position Sizing Rules – So a single bad trade won’t wipe you out.

If you have this plan in place, you can simply follow your rules instead of making emotionally charged decisions.

“Your trading plan is ready when you could give it to a total stranger, and they could execute it flawlessly.”
— Adrian Reid

Backtesting Builds Confidence—Use It

If you’re feeling uncertain about a sharp market drop, it’s usually because you don’t trust your system.

The solution? Backtesting.

Backtesting shows you how your strategy would have performed in past crashes. If your system survived and thrived in bear markets, you can trade with confidence knowing it works.

• Test your system through 2008, 2020, and past major crashes.
• Identify your worst historical drawdown—could you emotionally handle it?
• Verify if your stop losses and position sizing protect your account.

“Not knowing whether your trading rules are profitable is one of the biggest confidence killers. Blind faith is not a strategy.”
— Adrian Reid

Stop Watching the Markets 24/7

During market turmoil, staring at charts every second makes things worse. If you’ve done the work—designed a robust trading system, tested it, and have clear rules—then you don’t need to check your trades constantly.

Instead:

• Step away from the screens and let your system do its job.
• Limit your trading activity to avoid emotional over-trading.
• Stick to a structured routine—trade systematically, not reactively.

“In trading, activity costs you money. Patience makes the money.”
— Adrian Reid

Diversification and Risk Management – Your Life Jacket in a Storm

One of the biggest reasons traders panic during crashes is they’re overexposed. If all your capital is in one asset class, a market downturn feels like a personal attack on your net worth.

Here’s how to stay safe:

• Trade a diversified portfolio of strategies across different markets.
• Use proper position sizing so no single trade can destroy your account.
• Consider hedging strategies like shorting a stock or holding uncorrelated assets.

With diversification and risk management, even a market crash can be just another normal event in your trading journey.

“Your system’s drawdown must be within your tolerance, or you will quit trading it at the worst possible time.”
— Adrian Reid

Adopt a Professional Mindset – This Is a Long-Term Game

Professional traders don’t panic over short-term losses because they think in probabilities and trade long-term strategies.

They understand:

• Drawdowns are normal.
• Losing trades are part of the game.
• The market always provides new opportunities.

A losing trade or even a losing month doesn’t matter in the big picture. What matters is sticking to a proven system and executing it consistently over years—not days.

“One trade won’t make you rich, but one trade can take you out of the game. So keep your risk low.”
— Adrian Reid

Build Confidence, Not Fear

Market corrections aren’t a disaster—they’re a test of your discipline and preparation. The best traders trust their systems, manage risk, and think long-term.

So next time the market corrects heavily:
✅ Take a breath—this isn’t the end of the world.
✅ Stick to your rules, not your emotions.
✅ See downturns as an opportunity to refine your edge.

If you do that, you’ll come out stronger, more disciplined, and ready to capitalize on the next opportunity.

Now, ask yourself:

• Do you fully trust your trading system in a crash?
• Are your position sizes small enough to keep emotions out of trading?
• Have you backtested your strategy through past bear markets?

If the answer to any of these is “no”, that’s where you focus next.

And remember…

“You are only one trading system away!”
— Adrian Reid

Your Coach
Stephanie