What do i do here? (ended up losing...)

7.Qf3 was the root of all evil. Perhaps you were hoping for 7...Nd6??

Morally, you lost because of playing for a trap. 8...Nc5 would have killed you quickly.

silentarius, I was looking at the Bishop & Queen attack on F7 along with the knight pin. i was thinking if 8...Nc5 9. QxF7 Kd7 and possibly taking the knight or maybe Qf5 check but didtn look much past that. 

I'm talking of 8...Nc5, not 7...Nc5.

I'm just seeing that White could try 8...Nc5 9.Qg3 Nxd3+ 10.Kd2, but the simple 10...Nb4 11.Nxc7+ Kd7 12.Nxa8 Bxa8 is very good for black and there may be even better alternatives.

You've commented on a lot of moves but not 7.Qf3 (which was dubious) and 8.Bd3 (which was bad).

yea, i still have a long way to go...i dont think i see the board that well yet. Qf3 i understand, i shouldnt have put my queen in range of the bishop but why was Bd3 bad? too passive? 

8.Bd3 Nc5 simply loses material.

A few more notes:

4...b5 was an error from your opponent, 4...e5 was correct.

After 5.e5 b4 (or 5...Nd5 Nxb5) 6.exf6 bxc3 7.fxg7 Bxg7 8.bxc3 you should in either case win the Pc4 with a very comfortable position.

Instead of 7.Qf3, you should still have an advantage after 7.Nf3, followed by O-O. In open positions rapid development is most important.

I suggest that you analyse the game with an engine. In such highly tactical positions they are superior to any human player.