The first step towards making a progress is admitting that there is something wrong in the way we invest/trade. Sometimes, its fun to know that we all start the same way
1 - Ah, the price is going up, let's watch the market - As a momentum trader, we love when stock starts moving up on great volumes.
2 - The trend is holding - I'll buy at the next consolidation - There is nothing wrong to buy a stock which consolidates after a strong move.
3 - Damn I missed the consolidation, but if I wait any longer, I won't profit from the trend, lets BUY - The problem starts here - when the feeling of left behind starts building up. It is at this point, we tend to make wrong choices. We should never buy a stock with a feeling of regret. Remember, the beauty of market is that "Opportunities are plenty" and its not a great idea to chase a single stock.
4 - Good thing I didn't wait - This is the time when bull market is confused with brains. Remember, it is the method/process that makes money and not the stock. Most of us do not have any trading strategy, and we are just responding to our emotions on daily basis. If stock is up, we feel great.
5 - I'll use this correction to increase my position - Was this a part of trading strategy?
6 - Brilliant! At this price, let's double it - This is what I call phase of denial. When stocks correct more than desired, its time to be cautious and not greedy.
7 - Ouch, as soon as it goes up, I'm selling out - Now, the trend has reversed. The pain starts building up.
8 - I don't believe, its down to this price. It has hit an absolute bottom - The pain is on rise, and one just consoles himself
9 - Ok, lets wait it to recover otherwise this has to be long term investment - This is the point when one just gives up. There is a recognition that this investment is a gone case, and lets forget about it.
10 - What regulators are doing? - This is the point where one is so frustrated that he looks for scapegoat. He considers everyone responsible for this mistake except himself.
11 - Enough, I am selling out - The pain becomes unbearable. Where do most investors sell? - They usually panic sell at the bottom.
12 - Good thing I sold everything - Consolation
13 - It's going to tank anyway - The market shows first real sign of recovery. There is no point watching a stock you have sold. It only adds to frustration.
14 - Told you so - The first recovery after a steep fall always gets sold into. But if market fails to decline below the low it made last time - its time to buy. But one tends to forget that. The pain just blurs the thinking process.
15 - You what - The strong recovery in the stock adds to the frustration.
16 - What the hell - The feeling that market is against me starts developing. Remember, market doesn't care who you are. But we make this a personal thing.
17 - More crazy stuff - who is buying this? - There is complete denial that stock is undergoing stock recovery.
18 - Time to give up
19 - Buy it again - Time to give up again
The problem happens because most of us don't have well defined trading strategy, and we keep on changing our stance while we are in trade. "A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them."
1 - Ah, the price is going up, let's watch the market - As a momentum trader, we love when stock starts moving up on great volumes.
2 - The trend is holding - I'll buy at the next consolidation - There is nothing wrong to buy a stock which consolidates after a strong move.
3 - Damn I missed the consolidation, but if I wait any longer, I won't profit from the trend, lets BUY - The problem starts here - when the feeling of left behind starts building up. It is at this point, we tend to make wrong choices. We should never buy a stock with a feeling of regret. Remember, the beauty of market is that "Opportunities are plenty" and its not a great idea to chase a single stock.
4 - Good thing I didn't wait - This is the time when bull market is confused with brains. Remember, it is the method/process that makes money and not the stock. Most of us do not have any trading strategy, and we are just responding to our emotions on daily basis. If stock is up, we feel great.
5 - I'll use this correction to increase my position - Was this a part of trading strategy?
6 - Brilliant! At this price, let's double it - This is what I call phase of denial. When stocks correct more than desired, its time to be cautious and not greedy.
7 - Ouch, as soon as it goes up, I'm selling out - Now, the trend has reversed. The pain starts building up.
8 - I don't believe, its down to this price. It has hit an absolute bottom - The pain is on rise, and one just consoles himself
9 - Ok, lets wait it to recover otherwise this has to be long term investment - This is the point when one just gives up. There is a recognition that this investment is a gone case, and lets forget about it.
10 - What regulators are doing? - This is the point where one is so frustrated that he looks for scapegoat. He considers everyone responsible for this mistake except himself.
11 - Enough, I am selling out - The pain becomes unbearable. Where do most investors sell? - They usually panic sell at the bottom.
12 - Good thing I sold everything - Consolation
13 - It's going to tank anyway - The market shows first real sign of recovery. There is no point watching a stock you have sold. It only adds to frustration.
14 - Told you so - The first recovery after a steep fall always gets sold into. But if market fails to decline below the low it made last time - its time to buy. But one tends to forget that. The pain just blurs the thinking process.
15 - You what - The strong recovery in the stock adds to the frustration.
16 - What the hell - The feeling that market is against me starts developing. Remember, market doesn't care who you are. But we make this a personal thing.
17 - More crazy stuff - who is buying this? - There is complete denial that stock is undergoing stock recovery.
18 - Time to give up
19 - Buy it again - Time to give up again
The problem happens because most of us don't have well defined trading strategy, and we keep on changing our stance while we are in trade. "A man must be big enough to admit his mistakes, smart enough to profit from them, and strong enough to correct them."