Today I want to discuss one of the biggest dilemma of the investors:
Not being able to show patience in upward trend while waiting literally ages at loss!
I have experienced this countless times myself and also observed in others.
We all know that stop-loss is lifesaving, but let's say we missed this chance for this or that reason, so why do we insist on an instrument at loss and wait for really long long times?
Once, I waited for 3 years for a stock and at the end of 3 years, I could only sell it at breakeven point.
On the contrary, I once sold a stock at a profit of 30% a month after I bought it, but within a year it went up another 600%.
So why is this happening? Why investors can't wait when bars are green, while they can be patient with annoying red bars?
My theory for this dilemma is like this: When we are at lose, dominant feeling is “” (That trend will be turned back and we will cover loses and also make profits) So with this feeling we can wait! Because hope is a positive feeling!
But when we are in uptrend and get some profit, dominant feeling becomes “” (what if trends turns back and goes down and I lose all the profit that I made until today?) Fear is a negative feeling and people tend to get rid of it as soon as possible! So, people can’t wait in profit and sell instrument for a relatively small profit.
So this is my explanation of this dilemma.
An investor/ a trader will be successful as long as he can overcome his fear in upward trend and keep his hope realistic in downward trend!
