Focus on what is possible at your end rather than worrying about inflation, oil prices, GDP numbers, etc.
Can you predict the market direction, oil prices, etc. ? Not really
Can you take action when your stocks start falling? Yes
If you don’t have an exit plan then you may follow this very simple one below:
- Low conviction stocks: Sell if they fall below 20EMA or below your purchase price.
- High conviction stocks: Give them more room but sell if they fall below 50EMA.
- Stocks that are already in loss: Your personal call depending on your thesis. You should know why you bought it in the first place.
Selling will always be filled with regret. Either you sell too soon or you sell too late. But if you want to grow as an investor, you have to learn to live with this emotion.
But it’s best to have an exit plan. I have seen my big profits turn into losses. I don’t want to repeat that again. Either you can learn from others mistakes or you can pay a price to learn the same lesson.
Note: All this is not applicable if you’re a TRUE fundamental investor.
EMA- Exponential Moving Average
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