It’s the easiest to spot new stock traders. They retreat in the first sign of downfall or they completely give up on trading the moment they experience a loss. Are you one of them?
Indeed, it’s hard not to panic when things aren’t lining up to our expectations. When losing money, panic selling might seem like a fitting option; and it is, at times, a right choice. However, more often than not, it’s a wrong decision.
Long story short, if you’re losing money in trading, it’s likely the worst time to give up. Here are 4 reasons why:
It is a part of natural cycle
What goes up must come down. While not entirely true in this scene, this saying indeed holds mild prevalence here. You can’t expect the market to go only higher, can you?! It will rise and then simmer down and then go back up again. It’s a natural cycle that is necessary to keep the market in healthy condition. So your loss might be a result of this expected price fluctuation and nothing really to really be panicking about.
It is happening out of abrupt market development
An awful lot of factors come into play to decide the fate of stock market. Simple news emerging from a corner of the world can disrupt the entire market. Maybe, your current loss is a result of such abrupt market development. If it is, you can rest assured. Things will get back to normal in no time.
It is a small loss
What might be happening is you’re making mountain of a mole hill. It’s really a rather small loss yet you’re panicking. If that’s the case then understand, loss is a part of this game. You cannot avoid it. And if you’re just a beginner, still learning the basics, you’re going to cross path with it more often than you do with profit. So stop complaining, take such small losses on the chin, take up stock market trading courses, download the best stock market app, and keep improving to trade better.
It is you (!!!) and not the market
Here’s something that new traders don’t understand. You’re experiencing loss not because the stock market is unfavorable. You’re losing money because you have crafted poor trading strategy and even worse risk management. If this is the case, instead of quitting the game in loss, learn and improve your strategies to get back your money and build a sustainable portfolio.
These are 4 reasons why you should not stop trading even when you’re experiencing losses. At such times, you need to be more patient and have better trading strategies.