You Have A "Trading" Problem – 10 Steps To Fix It

STEP 3:  You are not a loser

Most people have a tendency to believe that if they “sell a loser,” then they are a “loser” by extension. They try to ignore the situation, or hide the fact they lost money, which in turn causes more mistakes. This only exacerbates the entire problem until they then try to assign blame to anyone and anything else.

You are not a loser. You made an investment mistake. You lost money. 

It has happened to every person that has ever invested in the stock market, and there are many others who lost more than you.

STEP 4:  Accept responsibility

In order to begin the repair process, you must accept responsibility for your situation. It is not the market’s fault. It is not your advisor’s or money manager’s fault, nor is it the fault of Wall Street. 

It is your fault.

Once you accept that it is your fault and begin fixing the problem, rather than postponing the inevitable and suffering further consequences of inaction, only then can you begin to move forward.

STEP 5:  Understand that markets change

Markets change due to a huge variety of factors from interest rates to currency risks, political events, to geo-economic challenges.

If this is a true statement, then how does it make sense to buy and hold?

If markets are in a constant state of flux, and your portfolio remains in a constant state, then the law of change must apply: 

The law of change:  Change will occur and the elements in the environment will adapt or become extinct and that extinction in and of itself is a consequence of change. 

Therefore, if you are a buy and hold investor then you have to modify and adapt to an ever-changing environment or you will become extinct.

STEP 6:  Ask for help

This market has baffled, and confused, even the best of investors and will likely continue to do so for a while. So, what chance do you have doing it on your own?

Don’t be afraid to ask, or get help, if you need it. This is no longer a market which will forgive mistakes easily and while you may pay a little for getting help, a helping hand may keep you from making more costly investment mistakes in the future.

STEP 7:  Make change gradually

No one said that change was going to easy or painless. Going against every age-old philosophy and piece of advice you have ever been given about investing is tough, confusing and froth with doubt.

However, make changes gradually at first – test the waters and measure the results. For example, sell the positions that are smallest in size with the greatest loss. You will make no noticeable change in the portfolio right away, but it will make you realize that you can actually execute a sell order without suffering a negative consequence.

Gradually work your way through the portfolio on rallies and cleanse the portfolio of the evil seeds of greed that now populate it, and replace them with a garden of investments that will flourish over time.

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Disclosure: The information contained in this article should not be construed as financial or investment advice on any subject matter. Real Investment Advice is expressly disclaims all liability ...

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