How To Deal In Stock Market? - Part II
We are suggesting that you become EXTREMELY MISERLY when you have profits to show.
With most traders and short-term players the major problem is that they are too casual about their profits.
Since the profit targets are not really defined, there is always a feeling that "this" trade can give me more money.
Doing so, you will turn a winner into a loser.
Once you have a profit, DO NOT LET IT GO, no matter what type of play you are in, how good the stock may be, how trended the market may be, how good your information/analysis maybe etc.
Celebrate Small Losses The first loss is the best loss they say.
This is truer than you realize.
Soon after the trade if the probability for profiting has gone down then it is better to take that loss and exit.
In order that there should be no emotional scarring over this, have a small celebration that you were out with a small loss.
It will put you in the correct frame of mind for the next trade.
If you celebrate the small loss then you will not treat the next opportunity as another threat but look upon it as a chance to win.
Welcome small losses in the short-term.
Celebrate them! We strongly believe that every investor who comes for trading initially gives losses as he/she is unable to have control over his greed and fear.
At times with all the information and luck in his favor, he makes profit, and then because of his new over confidence; trades more which results in his profit gone and also sometimes a portion of his capital gone.
This cycle of fear of the losses and greed to earn more makes him initially give losses.