Follow the herd instinct. When the price kept increasing, FO...
Follow the herd instinct. When the price kept increasing, FOMO sets in and started to buy. Kept holding the stock hoping to sell at higher profit. When price reaches its peak, it gets corrected and moved downwards in rapid succession that you are not in time to offload. When the price dips further, you are afraid that it will go further south and quickly sell. Hence, you got into a situation of buying high and selling low. Stock prices normally follows some cyclical patterns comprising of ups and downs. The worst case scenario is when you buy at its peak and sells at its bottom and got caught in its cyclical trap. To counter this situation, one must be bold to act against normal instinct. Sell when the price is still going up (not sure end it will reach its peak) and buy when it is moving southwards. It it difficult to predict when it will reach its peak and vice versa is true. Another caution is that we must treat rumours (originating from ‘gurus’ or HFs) with many bags of salt. Need to understand their rationale and objectives for releasing such trade rumours or news. There’s no free meals.
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