The evolution of mindset after foreign exchange investment losses

Only those who are good at stopping losses can invest well. But why do some investors not stop losses when they know they are wrong? This is related to the mentality of these investors after losing money. Investors at different stages have different attitudes towards losses. Studies of mature investors show that this mentality has generally evolved throughdeny、anger、self-blame、pessimisticandacceptFive stages.

deny

denyIt is an instinctive self-protection mechanism in the human brain that does not want to be hurt. When investors encounter losses, their first reaction is to not want to admit it, express doubts or comfort themselves. The more typical practices in the stock market are "don't sell after being stuck, don't sell without losing money", "I want to be a value investor for long-term investments", or "I want to leave the stock to my grandchildren". In fact, being stuck means that the stock market value is lower than the invested capital, which means losing money. Therefore, these practices are essentially not admitting mistakes.denyLosing money makes things worse.

anger

When losses widen further, investors tend to become hysterical, look at everything unpleasantly, and often get angry. The more typical manifestation is that some people vent on their family members for no reason; others put the blame entirely on the government, listed companies or bearish market players, and even scold the government, listed companies or bearish market players to vent their anger. In fact, investors should keep calm and admit that the responsibility for losing money is on them, because no one is forcing you to buy stocks. Buying stocks is your own decision.

self-blame

When discovereddenyandangerWhen it doesn't help, some investors finally realize that blaming others is useless because investment behavior is their own decision. So they take a U-turn and start blaming themselves and regretting their investment decisions. It doesn't help either. The right attitude should be to actively check what you are doing wrong in order to improve your investment method and improve your investment skills.

pessimistic

Huge losses, or years of investment failure, make their own funds suffer a heavy blow, the soul is so great that they can no longer see any of their own advantages, so investors will have serious frustration and loss of confidence, manifested as depression,pessimisticHe felt that the end of the world was coming. He even considered whether he was suitable for investment work, whether he wanted to exit the investment field, and whether it was time to "wash his hands".

accept

After countless investment failures and summing up experience, and finding the investment method that suits them, a few mature investors believe that losses cannot be completely avoided, as long as they lose small money and make big money, they will be successful in investing. Therefore, they immediately admit the truth when they encounter losses, or they are prepared to lose when they enter the market, so they will stop losses in a timely manner according to the situation. Therefore, for them, losses do not cause psychological burden at all. The investment master Soros has done a good job in this regard. He believes that human understanding is flawed and a part of human beings, so he does not take a negative attitude towards failure or mistakes. On the contrary, for him, "it is a matter of pride to be aware of your mistakes".

In short, after investors go through the above stages of psychological process, if they can gain valuable experience, they can gradually become mature investors. It should be pointed out that it is impossible for investors to recognize this kind of investment at one timedenyTo the endacceptThe process needs to be repeated many times in order to become mentally mature.