No matter how experienced or savvy a stock trader is there are upturns and downturns. Every trader, whether full time or part time, experiences these unpredictable periods of highs and lows. One week or month a trader can make fantastic profits and the next month that same person can feel like it’s time to throw in the towel. Not to be discouraged, because traders who can stick through the thick and the thin can learn to persevere until the market is once again favorable.
Traders can pass through many different lives throughout a trading career. One day they’re on top of the world with great profits and all is good. But if they’re not careful, their losses in the next downturn can wipe out all those high figures. Experienced traders learn from their mistakes and know when to sit tight before trading. As many swings as the market takes, traders can fluctuate even more.
Beginning with High Expectations
New stock traders are usually very optimistic and gung-ho about jumping right in and getting their feet wet. They’ve done their homework, taken all the right courses and read all the best books. So they throw their money to the wind and that’s where it stays. They don’t see the profits they were expecting, or hoping for, and their money is gone. Of course this can happen to the more experienced traders just as well, but it’s a typical beginning scenario.
Everybody Loves an Uptrend
What is there not to love about uptrends? It’s a time when new and veteran traders can get in there and make some real money. While earning money, you can hopefully get valuable experience in methods and trading plans that will help you during downturns as well. So for whatever reason you’re earning good profits now, keep them up as long as possible.
Don’t be afraid of new beginnings. If you stayed in longer than you should have or you placed trades that weren’t profitable, you’ve hopefully learned from those experiences. So long as you can still come up with some capital to keep going, you can see profits once again. At least starting over doesn’t put you back to the very beginning. You now have experience under your belt and know where your boundaries are. The important thing here is that when you get going again, evaluate where you can best manage your risk so you don’t wipe out your capital again. If you were too risky with your investments, find plans to help you trade within safe margins. If you risked too much of your money, set your limits differently. Tighten the belt on what you allow yourself to invest. If you got out of the market too soon, just before an upturn then consider being more patient. Don’t make quick decisions without studying the market and understanding its direction.
Whatever happened and for whatever reason, you can learn your lesson and trade more profitably in the future.