ZF Capital

When we notice the impulse to trade based on strong fear, it is usually best to literally step out of the trap by stepping out of the situation.

We need to get up, walk away from the computer and television, take a walk, get a diet soda, go outside and water the plants, or do anything else that will move us out of the fear/panic mode.

Don’t return to the computer until you have managed to achieve some emotional control over your fear/panic reaction. If you can’t get a grip on your fear, then don’t come back that day.

Most likely you will find that even if you keep thinking about the miserable market conditions while you water the planters, simply getting away from the keyboard and monitor is enough to make a difference. It removes the demand to take action and gives you the mental space to gain perspective and let go of your knee jerk sell reaction.

– Steven Hendlin, The Disciplined Online Investor

If you have never had your limits tested, should a big loss occur, how will you know you can reach deeply enough into yourself to find a sense of identity that transcends your financial status? Or are you just a 30 percent loss away from feeling like a ’failure’ and ending up in my psychotherapy consulting room?

This is why I argue for knowing your own personality tendencies and seriously considering them in your online investment decision making. If you already know that the terrible anxiety of financial loss would be more than you can mentally and emotionally tolerate, this concern must be weighed heavily in the risks you take.

– Steven Hendlin, The Disciplined Online Investor