Category: Money tips Release Date: 2007-06-09
Individual in the face of loss, there is a tendency to risk appetite for the receipts in the tendency to risk aversion. Reflected in the stock investment, investors often sell profitable stocks, while continuing to hold the stock losses.
How to escape from the "averse" psychological trap? First, we must recognize that they are in a "averse" to which stage of the process. If the problem is motivated by greed (assuming we hear some "insider" news and not wait to leap forward), we should leave for their own breathing space to allow room for fear has surfaced.
1 fear
When we make a decision, I suddenly felt fear, that fear must be at the top of it, and you can not see bullish factor.
Methods to overcome: First, to identify their own emotions and the potential psychological pitfalls --- "fear." Then, try to think favorable side: "The stock is limited downside risk, but may rise. It is a great potential in the market, there is a specific survival of the foundation ... ..." If the fear often make us unable to move, then put the decision-making process and best course of action separately. Perhaps you could consider the whole situation in the night, to the morning to do is to call buying.
2, greed
If you buy a new high-tech stocks, just beginning to think its future is bright, and to speculate how high the price will be risen to. If you therefore feel excited, then you are in a "aversion" psychology "will to close" to this end. However, this situation may easily be reversed, because the negative factors yet to emerge. At this time, we must use restraint "greedy" step.
Methods to overcome: First, recognize the potential of our emotional and mental traps --- "greedy", and then forced himself to consider and feel the opposite factors: the production has not yet improved the management system is not fully developed, there is no surplus, may be the emergence of new competition persons. Greed is a rather difficult to overcome the trap, when we face a dilemma or a choice, they should find a way for themselves a little time. Transactions with us, if people do not give us this opportunity, remember not to have anything to do with this person.
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