PSYCHOLOGY TO HANDLE PROFIT IN THE STOCK
When people make decisions based on emotions, they don't always make the right decision. So if you decided without getting too emotional, it was probably based on facts and figures, which is called data-driven. That means you used data to help you make the decision, which is usually the best way to do it.
An emotional person missed a good opportunity. They believe that something big must happen next time, which causes them to lose in the long run. Some people believe this, but they do something special that makes them profitable in the long run.
as an example.
An illustration of this attitude is when someone has done the research and likes a stock, but even when the market conditions become favorable, they can't seem to make the commitment to purchase it. When it went up, he became very happy about the past, so
He wanted to do it again.
After weeks of research, he eventually located a new stock he felt held great promise. Taking a leap of faith, he invested in the stock and watched in amazement as it gradually rose in value by 5%, 10%, and then 20%. Images of a sure-fire multi-bagger stock quickly filled his mind.
Yes, I found it, and yes, my money will go up 2x, 3x, and 4x, and I am a long-term investor.
All these things happen due to "indecision."
When you start a journey, it's important to know what you want to accomplish by the end. That means you need to decide what you want to do, and what your goal is. Without that, it's hard to know what steps to take and how to reach the end of your journey. As a result, your dream is becoming more real by the day, and it will only end when you are extremely wealthy.
But, my friend, that must not be reality. When the stock price is down by 30, 20, 10, or 5%, you start thinking about selling, but somehow you hope for a bounce back and cannot sell that share.
When it is below the line of your profit, which means you are at a loss, then your mind starts thinking, about either long-term value investing, booking a loss, or getting out of the stock.
But now you see why this happens. This happens because the nature of the stock market is going up and coming down.
As if a ball were high in the sky, it would come crashing down. It is a natural thing.
As a human mind, we are joyful when we see a profit, and our neuro system starts generating good thoughts about it and the possibility, but when we see a loss, we cannot believe it can happen, and then all the negative thoughts come and make us feel wrong about it.
Then what is the solution?
The solution could be found in a lot of ways in math, but I can tell you my way.
The way to my solution is just a mathematical solution.
See what happens when you enter.
When you buy stock, set a goal for yourself.
- 5%
- 10%
- 15%
- 20%
If all these things are achieved, take a profit and get out; if you still think it will be a multi-bagger, keep the free stock and sell all others.
As an example, if you buy five stocks at ₹10,
Then your profit was 10 rupees, so you sold the four stocks while keeping the fifth as free stock.
Every time you want to buy a stock, find math in it.
- Find the math
- How to book profit
- How to minimize my loss
- How to stay profitable
- How to save tax
Everything is all right; when you are in profit, but when you started losing, you became unstable. At that time, find a way in math to be profitable.
I'll tell you my way.
When you enter a stock, you should always set a target.
If your stocks have a downside of more than 20%, you track the stock loss in percentage on the last day of the week. After one week, look which stock loss decreased in percentage and then average in that stock with 1,000 if you have invested ₹15,000 and 2000 if you have invested ₹30,000,
Average with 1000 Every week, if any stock price rises from last week,. Do not invest if it is downgraded means the stock price decrease.
Always remember, we have to buy a stock when its price is moving upward.
Remember your target while entering stock and when the target is hit. sell the stock and book profit.
see the below table to understand
Remember your entry time intention, which will help you achieve your goal.
Last word
Psychology can only be dealt with mathematically, so use math to manage your profit and become profitable.
Always set a target before you enter a stock.
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