If you trade for much of any time at all, you will experience every emotion in trading. You will be happy and sad all within the same few moments. How is this so? This is true based upon the feelings of yes, I will buy or invest in that product for $X price only to watch the price then drop to half the value. All of a sudden, you went from yes, this is a great investment to no, I made a mistake and now I’m down on my investment. Have you experienced this? So, what do you do? You get rid of it. Why? Because it is not worth what you thought it was. However, the person that buys it from you at the half price you paid for it is excited because they now feel they received a great deal only to see the item again to half the price they paid. You have a sense of relief that you were able to get out of that bad decision. However, a few months, to a couple years pass and you see this investment again as it comes back to your attention. This time it is worth double what you invested in it and 4x what the person you sold it to invested in it. This will leave you feeling all emotions.
How to Overcome This?
Overcoming this roller coaster of price wars is beyond your control. However, you can control how you react to the investment. You need to take a look at many charts to learn the flow of the stock and the market trends. The first thing is to only invest with money that you do not mind going to nothing, $0. Next, try to trade with no more than 1%-5% of your account so that you can mentally build up your ability to trade with losses and gains. Both of which are an emotional roller coaster that can effect your so many ways. In the book, Trading in the Zone by Mark Douglas, you can see that anything can happen and most likely will happen with trading psychology.
You may want to be involved in the Mastermind group that helps you recognize your trading psychology and improve your investing experiences.
