Learn Investing Secrets

People tend to feel sorrow and grief after having made an error in judgement.

Investors deciding whether to sell or buy a security are typically emotionally affected by whether the security was bought or sold for more or less than the current price.

One theory is that investors avoid selling stocks that are going down, in order to avoid the fear, pain and regret of having made a bad investment.

People tend to feel sorrow and grief adapted to having made an error in judgement.

Investors deciding whether to sell or buy a security are typically emotionally tall by whether the security was or sold for more or less than the current price.

One theory is that investors blink selling stocks that are going down, in order to reel back the fear, pain and regret of having made a bad investment. On the other hand, they also shrink back selling when prices are going up, being they are very greedy and are scared that the price will keep on going up.

Many people are wondering why they didn't take their i.e. 100% or 200% gains when they had the chance. Most investors will rationalize they ran these high gains down seeing as how they were faint they would lose even higher profits. In my opinion, for many of these investors, it was just plain greed that prevented them from selling their stocks.

Every experienced trader knows that fear and greed are two emotions that can dramatically rock your success in the market.

You have to deal with controlling greed and fear every single day. at all events there are no easy answers when it comes to the stock market, of one thing I am certain:

If you are a greedy trader and regularly try to squeeze every last point out of every trade, it's only a matter of time in the lead you end up with a lot less than you certainly started with!.

Oliver Velez of www.Pristine.com says that greed is "that little monster that resides in every single individual." Part of our success in the market, he says, is learning when to give this little monster a little bit more room to operate and when to curtail its actions. "Every single event has two ultimate outcomes--either a win or a loss," says Velez. "Greed can make you gaze at the stars without having any consideration of the rocks below. It can prevent you from considering the fact that there is a downside and establishing a stop loss, or developing a systematic way of exiting or aborting a trade if in fact things don't work out."

The embarrassment of having to report the loss to others may also contribute to the tendency not to sell losing or gaining investments.

Some researchers theorize that investors follow the crowd and conventional wisdom to obviate the possibility of feeling regret in the event that their decisions prove to be incorrect.

Many investors find it easier to buy a popular stock and rationalize it going down since everyone else owned it and thought so highly of it.

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