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1 comment:
Thanks to Jupiter for his valuable post:
Walking away from a loss market is a very hard thing to do but hanging around at a falling market is the biggest sin of all-- Marcus Padley
Emotion is a big problem in private investors. Once you are thinking on accepting a loss many things come up in front of your eyes, money, relation, future and finally the hope( the awful one).
If you are having trouble of accepting a loss, you are more tending to be emotional, and you are not enjoying your trade. You are getting emotional and keeping the stocks in your possession!
If a stock is going down , it is far more likely to go down than reverting to fulfill your wishes.
The further a stock falls the more intense the selling becomes, as higher losses cause more selling decisions. So sell early. An early loss is the smallest loss.
If you sell 10 falling stocks, as any technical trader will tell you, it will be right to do in the nine cases- but you will only remember the 10th stock.
If you sell now you are no longer exposed. All you have to do is come to term with loss. And if you sell now you can always buy back the stock and who knows you may get them even at lower rates.
If you sell now you enter the eye of a storm. All becomes calm, you can see the turmoil from a distance and have a moment to think. You can always choose to enter the storm again and if you do not you will be thinking more clearly and be armed with a plan.
If you are making loss in a stock, think to yourself: if I had cash , would I buy this stock now at this price ? No? Then why are you holding it? Sell it.
Your state of mind has a value.
Finally what would your spouse, friends and children pay to have you carefree at the weekend instead of ripping the heads off and everyone is looking at you. There are not that many weekends in a year of your life. Don't ruin too many of them by keeping loss making positions until Sunday because you didn't have the guts to sell them on Thursday.
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