The last two days were quite amazing. First, over 100 points drop and then next day ( today) a V shaped recovery starting almost in the morning itself.
It is possible that some of us - especially the new ones - had difficulty coping with yo yo days, and may have incurred losses.
Losing money is never pleasant, particularly so if it was a trending day and you know it should have been a money making day. Such losses play havoc at the back of your mind.
Here are a few things you must guard against while you go back to trade the next day.
1. Forget about the loss - In particular do not try to trade trying to recover the lost money. (Remember that neither the market nor other traders have any idea of your loss and they simply do not care!)
2. In stead of focusing on recovering from the loss, focus on the trading methods and plans relevant for the day - where are the support and resistance? how big are the fluctuations, etc. In other words, focus on trading right as opposed to trading the of having lost money.
Steenbarger has written beautifully on this topic. You can read these here and here.
If you have any comments please write to me at stockmarket.methods.in.madness@gmail.com
15 years ago
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