A neat trick
it's funny. when clicking through i remembered that you can't take back with the knight but couldn't remember why. so, perhaps i have partially learned.
This is the first opening trap I ever learned.
Second was the Damiano Defense.
Do you know what the name of this one is?
You can get away with 3...Nxe4 (it's not recommended... the mainline is 3...d6), your game wasn't lost until the 5...Nf6? blunder. You needed to play 5...Qe7 counterattacking his N and blocking the discovered check threat. (Alarm bells should ring whenever your opponent has a discovered check.) The key to keeping material equality is often not to defend or retreat an attacked piece, but instead to counterattack your opponent pieces.
*edit* You know, looking over some 3...Nxe4 lines in the game explorer, it's actually pretty solid! 3...Nxe4 Petroff might be worth a second look.