Handle Downturn In Market
By Anthony Green
When the bottom falls out of the market and investors begin losing money, they often take on a school-age mentality and begin pointing the finger at their peers. �It�s his fault!� They look to the Fed, market gurus who lower their equity ratings, online trading, chat rooms, margin calls, Asian Flu, etc. During any market cycle, the best thing one can do is ask, �What can I learn from this situation?� The best traders and investors always evaluate what went right and what went wrong in their trades.
Look at how you handled the downturn in the market and see what you did right and what you did wrong. Consider the following:
- Did you initiate new positions when the sector was at 90 percent?
- Did you fall in love with your stocks and forget they don�t love you back?
- Did you abandon the game plan because �it�s different this time�?
- Did you own stocks in which the volatility was OK on the upside but not on the downside?
- Did you decide to disregard the chart pattern and the sell signals?
- Did you say, �I�m a long-term investor� until your stock was down 50 percent?
- Did you initiate the buy portion of the trade correctly but not the sell side?
- Did you let your clients or friends sway you from your game plan?
- Did you hold onto a dead horse, lighting candles and hoping for a miracle cure?
- Did you heed the sell signals, so that your account then had cash available at the bottom?
- Did you take partial positions off the table, lessening the blow?
- Did you switch some of your holdings into defensive issues?
These are just some of the questions to ask yourself. The market is a continuing learning process, and we�re never too old to learn. Take time to sit down and evaluate how you handled the last market cycle, and be honest with yourself. When things don�t go our way, it is always easiest to look for someone else to blame rather than looking to ourselves for what we might have done wrong. And in some cases, you didn�t do anything wrong.
Sometimes you do everything exactly right, given the information at the time, and the trade doesn�t work out. That�s life on Wall Street. Nothing is ever 100 percent correct. And remember, if you did the right thing and raised cash before a market downturn, holding only those stocks with strong relative strength, but your portfolio still gave back some headway, that�s OK. It�s a big bet to go to 100 percent cash, but you are sitting better than a lot of people and have cash available to employ on the next opportunity. If you did gravitate from the game plan, use this evaluation process as a wake-up call to reacquaint yourself with your plan. Learn from the experience, so that the next time a high-risk situation presents itself (and you can rest assured it will), you will be ready to take action. If you ignore your mistakes, you will just keep making them over and over again.
About the author
Get 89.3% accurate stock market trading tips and online stock trading strategy, Turn 1000 USD into 1,000,000 USD guaranteed. For more details visit http://www.5minutetrader.com/. from http://www.FreeArticlesAndContent.com
|
|
Copy This Article
For FREE!!!
You can use this article and copy it on your own website
for free! All you have to do is make sure the article
is copied with no changes and includes the "About
The Author" text. Also please ensure that all url's
are hyperlinked according. Thank you. |
Link To This Article - And We'll
Link Back To Your Website!
You are more then welcome to link to this article! All
you have to do is copy this webpage address from the
address bar and create a link on your website. Please
use the title of this article for your link text. Please
get in contact once you have linked to this article
and we'll link back to you! Thank you. |
|
|
|
Other great articles from this category...
|
Related Sites
|
|
