The sky is falling - for the 5,000th time!
Over the past few days the market was hit hard, dropping a few percentage points in only three days. Much like Earth in the universe, this drop was the size of a grain of sand compared the entire history of the market. However, to those people living through this drop, it felt as if their life was over.
It was not.
Again and again, this situation repeats itself with the same results. People panic, sell at ridiculously low prices, then the market recovers and all is tranquil again.
Consider that if this situation occurs so frequently in the market, then the person able to capitalize on this situation will consistently win. So what type of person is this?
Easy. The person that does not chase stock prices upward; instead, purchases strong stocks during dips.
Now this is easier said than done. Nearly everyone knows the phrase "Buy low, sell high" - yet nearly no one follows this advice. They fall victim to their emotions and end up buying high, selling low.
To become a successful investor, you need to control your emotions. The best way to do this is to believe in the validity of your trading strategy, which means you must use a logical trading strategy.