The art of re-entering an investment when it is reversed and then reverses in your favor after exiting is among the most effective strategies that a trader can use in the short term.
Each short-term trader has the experience of letting go of the position to save the profit, only to have the position immediately return to beneficial ways with no one else in the picture. To enhance your knowledge more, you can check the latest news for ETF Express online.
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Many traders have rebuked themselves for letting the profits slip away and then watched from the sidelines as the stock increased without the profits.
The actual pain of losing illusory profits can be as significant as real dollars that are lost in a loss-making trade.
Cognitive scientists have discovered that the loss of profits lost is three times more significant than the actual dollars earned.
For instance, if you concluded a trade that brought you a $300 profit, and then you witnessed it go through a reverse, and then it gains another thousand dollars, which you missed, the science suggests that the negative and positive feelings of the trade would likely cancel each other out, leaving you feeling empty.
This is the case even if your trade proved more successful in its execution than your original idea.
The odds are stacked against individual traders with emotional obstacles such as these to conquer.
The issue with profits not being made is that the emotional burden of the loss is likely to be carried through to the decision-making process for any subsequent trade.