Fear and Investors

by b_t

Sorry for my long period of not-posting

OK, now let's discuss the other extreme things investors will face in their making money work else than greed, fear. This fear can brought you, investors, enough trouble such as what greed can do to you. It can cloud your mind and direct you into making wrong decision. And as you already aware, wrong decision costs real expensive sum of money. It'll just drive your money to the drain fast, just like what you experience with greed.

Most people felt fear. In fact, it's normal for people to have fear in their behavior. It's even something abnormal when you don't have it. This applied the same in our money making and investment process. But, what we should remember is the law of our life about how everything is excellent for you while you have it just sufficient. Once you found it much less or much more, problems awaiting. So, this fear is something good. If you have it sufficiently. When you have it too much, that would change you as someone paranoid. When you lacked it, you would become someone reckless. You will be the one who eager to jump onto your enemy while carrying nothing but your fists.

fear in trading



Please let me show you the danger of having excessive fear in trading.

Now, You have already understood how the price of anything traded in the market is always changing, whether it's inclining or declining. About this fact, when you are just one outside the market (means you have nothing to bet inside the market), is surprisingly obvious that it's a natural thing. It's really natural for market is formed by the mechanism of buy and sell, of demands and supplies. Just like what we had learned in our economics class.

But, what you see outside tends to change when you go inside. And why is that?? Well, here, when you go inside the market, you will have something to bet on something. You may bet anything. I mean, if you are a broker, who gives some advice to you clients, you will bet your reputation in the market. Or you just simply bet your money there. In brief, by entering the market, you have good chance making some money. But well, you find yourself having plenty of chance of losing it too.

Then, let's imagine yourselves in the middle of this what we called market. You put your money, let's say 10 millions dollars, in the form of shares of the certain company that you believe is good. Obviously, you begin to take your very attention to the price of your shares right?? You want to know whether you make some, or you lose some. While watching those ticks, consciously or not, you begin to feel something awkward. You feel enormously happy when the ticks goes green. Otherwise, you get very depressed when red light comes.

And then, after a while, you look again at your ticker. There you found your price at 1019,45. Actually you have already understood before how this price is undervalued. In a few more minutes, the price will go rise up. This is what you concluded from your assessment before. And that's also why you decide to buy the shares. But the most surprising moment finally comes. Not more that 2 minutes, your ticker shows bright red light. It shows 1018,78. That price is actually still good. You can still afford it. But then, somehow, you felt something strange again. You begin to imagine how that 1018,78 will get worse. Then, just encouraged by that instinct, or whatever you may call it, of yours, you decide to cut it before it goes anyway further. You then call your broker. Tell them to cut at once.

But then, what happened in next three minutes will absolutely giving you big disappointment. Your shares goes from 1018,50 rising as far as 1021,45. One big hit.


There you go. Fear of how your money will go to the drain is something that helps you really put your money into the drain. It'll cloud your mind. You won't be able to make right decision while you still have that fear inside of you. So, what you really need to work right now is learn how to make better control of your fear. That way, even when you are frightened of something, you would still able to push your mind in making right decision for you.