Being disciplined is by far the hardest thing to do when it comes to the tech stock market. Many people panic when it comes to their money, and they also get too excited and greedy. When it comes to trading, you need a lot more discipline than investing, but you still need it in investing. But I would also say the consequences of not being disciplined in investing are more costly than trading.
When trading, you can cut your losses and not be hurt too much. Even though a series of mental lapses will kill your capital, when you are undisciplined in your investment portfolio, you could lose significant capital over the time that may have taken you months or years to accumulate. So how do you stay disciplined in trading and investing? You should find more information about jeff brown investor to learn more about tech stocks investment.
Let’s start with trading. Trading requires you to have a definite plan when you get into a position. This includes an entrance point and an exit strategy. It is helpful to write this plan down as it will help you remember that plan and give you a reference to look at later. Stop losses can also help you automatically stick to your project and will help you calculate when to get out if a position goes south before your emotions are invested in the move.
It would help if you also had an exit strategy. You can do this in many ways. You can look at technical resistance levels to determine when to get out. You can use a specific percentage gain as a way to decide when to get out. For example, you say after I’ve made 50% of my initial investment, I’ll get out. You can start selling as the tech stock goes up so that after a while, you have secured the money you put into it initially and then continue doing that until you are satisfied.
Another thing you can do is use a technical indicator to determine when to get out. Examples of this could be when a moving averages cross or volume falls below a certain level. You can also use things such as the MACD and the Stochastics.
When it comes to investing, discipline takes a different angle. It’s like dating actually. You know what you’re looking for and what you will and won’t tolerate. When a company has a great story and great fundamentals, then there is no reason to panic.
What happens a lot of the time is that people do the homework and are shocked that their tech stock doesn’t go up immediately or goes down soon after buying it. If your tech stock goes down, you should recheck the story and the fundamentals and if everything is still good to buy more. This is what Warren Buffet, Jim Cramer, and other great investors do.
Panic is not your friend ever in the market. If you panic, then you will sell low and buy high, which is the opposite of what we want to do. Doing homework is the only way to stay disciplined in the market. When you’re confident you won’t panic, you’ll see opportunities, not obstacles.