How do you avoid getting emotionally involved in a stock?

My biggest losses have all been the result of getting emotionally involved in a stock(especially one that has made me money in the past). What strategies do you use to avoid this.

Asked by Grudun in General Market 7 months ago

Best Answer

360 points

SirCrashton answered 7 months ago …

All previous posts are excellent suggestions. As a novice trader, one other thing that is helping me to overcome emotional responses is to do lots of paper trades adhering closely to the trading rules I established for myself. Because of the sheer number of trades I track, this process enables me to become "desensitized" about individual stocks and refine my trading rules as I gain experience, without costing me any real money.

Answers

698 points

7million7years answered 7 months ago …

Simple: by have 'investment rules' that tell you what and when to buy.

Then the question becomes: "How do you avoid getting so emotionally involved in a stock that you forget your rules?" ;)

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391 points

slick answered 7 months ago …

create a system with strict rules and follow it!

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141 points

gap answered 7 months ago …

One easy way is to just look at your profits and get out when you hit predetermined levels,no matter how much high it may go after you sell it...Investment is not for Charity..you need returns...leave the best for the next

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129 points

tarenfro answered 7 months ago …

It important to know your own emotional state when you are making trading decisions. If you don't you can't separate your logic from your emotion. If you are feeling particularly stressed out or anxious don't trade. You should use stop losses either actual entries into your broker or online account or a mental stop. This will help you stay out of large losses when stress is high. Don't gamble (speculate) with money that you depend on for day to day needs. Consider the worst that can happen and plan accordingly. If you are a highly stressed person consider more conservative investments or an independent money manager that you can trust.

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