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转贴 - 4 things to do during market corrections.

(2018-11-20 14:57:18) 下一个

连续7,8天大盘下跌,领头科技股从高点跌幅20-30%的情况下,可能应该采取的应对措施。

https://finance.yahoo.com/news/4-things-market-corrections-185733753.html

 

4 things to do during market corrections

The past two months have been challenging for many traders and I’m writing this article to offer words of encouragement. When this correction is over, there will be tremendous opportunities. Obviously no one knows when this will happen, so a high degree of patience and discipline will be required until market conditions improve. In the meantime, here are four things you can do to prepare for the next uptrend.

1) Protect Capital.

The best traders throughout history all preach defense first. One way to stay defensive is to raise cash. During corrections, the reason I raise a higher than normal cash position for clients is that 4 out of 5 stocks move with the general direction of the market. In other words, no matter how well a company is doing, nothing is immune to heavy institutional selling pressure.

2) Protect Confidence.

Don’t underestimate the importance of protecting your confidence. Many traders get discouraged and frustrated during corrections. Unfortunately, when the next uptrend begins, they hesitate and have trouble pulling the trigger because their confidence has been shattered. A few ways to keep your mind strong include reading, performing post analysis of trades, and making the proper adjustments to improve on past mistakes.

3) Minimize Trading.

I’ve been trading for over 20 years and the most frustrating times to trade are during corrections. One adjustment I’ve made is to mostly sit out because I prefer the mental break and to avoid aggravation. If you are inclined to trade, I suggest keeping your positions lighter than normal because volatility increases during corrections. Too many traders get chopped up due to the wider market swings, but keeping smaller positions may help you avoid getting constantly stopped out.

4) Keep a watch list.

When the market bottoms, there will be some explosive opportunities in stocks that have been held back by this correction. Keeping a list of growth stocks that are holding up well is one of my favorite things to do during a correction. For example, after the March 2009 bottom, Netflix and Green Mountain Coffee were two of the first stocks to emerge to new highs and they went on to experience tremendous gains.

I realize there are many strategies to use during corrections and as I always say “Do what works for you.” If you survived this correction so far, I applaud you for your discipline and I encourage you to stay focused on your process. If you struggled recently, keep your head up! Learn from your mistakes and make the proper adjustments so you can correct them in the future. I used to get discouraged during corrections and think we’ll never see another uptrend again. Now, I am highly encouraged because I know with 100% certainty that there will be strong opportunities once this correction is over. The key is to protect your capital and confidence until then, so that you are ready to take advantage when we see healthier market conditions. Who knows? It could come sooner than you think.

I can be reached at: jfahmy@zorcapital.com.

Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained on this site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned on this site. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. 

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