Which Stock Market Losses Hurt Most?
Stock trading is unfairly infamous for losses. It is the opposite of lotteries as far as media coverage goes. Have you ever read about the people who buy tickets everyday without any winnings? Conversely, making steady incomes through stock trading only rarely makes it to the front pages. However, extreme risks with professional option trade can even land you in jail!
It is only logical to take positions based on your reading of trading conditions. The stock market tends to over-react to cues. Influential stock investors may behave in the most irrational manner. Responses to a minor delta may be so exaggerated or sustained that stock prices continue to rise after you have booked a profit. The recrimination over gains that ‘could have been’ is painful. However, it does not match the penalties for an extended bearish phase.
Some people are so addicted to option trade that they take opportunity losses to heart. The key is to set clear exit points and rest satisfied with target profits in the bank. A turnover focus helps to assuage grief over lost profits. Hectic stock trading keeps you busy at the very least.
Protecting capital is another matter. Cash losses can hardly ever be justified. Stellar careers have been ruined in just one trading session. The opprobrium is worth avoiding at almost any cost. Fortunately, this can be easy if you have the discipline to adhere invariably to fundamental stock trading rules. One is to trade within affordable limits. Another is to be prepared to make losses, with contingency plans for recovery. The third is to know when it is time to jump ship.
Do you have a magic formula to keep stock trading losses manageable? Would you like to know more about how to balance risk with profit aims? Why not register at our forum and start posting your queries and comments? It is free, so you will never make cash losses. Start today.