Market Correction: 3 Productive Routines To Implement
Ross
Ross is a co-founder of TraderLion and Deepvue. He was mentored by William O’Neil, and co-authored The Model Book of Greatest Stock Market Winners at WON + Co.
Published: May 19, 2022
Stock market corrections appear with varied conditions and qualities. In some cases, they can be short, shallow, and relatively painless. In others, corrections can be drawn out, deep, and painful, both financially and emotionally.
In this post, we will discuss some of the best techniques we’ve have developed to handle all types of market corrections, especially longer ones, during my experience as a position trader.
Having a plan in place during these times is very important for consistent success in the stock market. Unfortunately, most traders and investors are completely unaware of the essentiality of managing risk during a correction. Here are some of the reasons why.
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Why Most Traders Struggle During Corrections
- Planning for a market correction is rarely discussed, and when it is, it typically isn’t detailed or in-depth.
- Many traders and investors have never learned how to manage risk, much less survive a long, tedious correction.
- Many traders and investors don’t realize the importance of managing risk.
- Instead, too much time is spent focusing on trading methodologies, techniques, stock picking, and indicators. These other methods are overstudied.
- Gradual losses often go overlooked. Getting chopped up slowly in a long correction takes its toll, both financially and emotionally.
Proven Techniques for Handling Market Corrections
Here are some routines I have found to be extremely helpful during lengthier declines in the general market.
Focus on Your Personal Life
Spend time with family and friends, improve your health, take a vacation, work on a side hustle, etc.
Maintain Your Watchlist
Maintain an updated list of the strongest stocks for when the next uptrend gets underway. These are typically the leaders of the ensuing uptrend.
Practice Patience and Discipline
Patience and the discipline to stick strictly to your methodology are key. Don’t get chopped up trying to catch the bottom or because you are scared you will miss something. FOMO, or the fear of missing out, can be extremely costly.
Learn Market Navigation from the Experts
Understanding how to navigate market corrections is crucial for long-term trading success. These
techniques require practice and discipline to implement effectively during stressful market
conditions.
TML Talk provides real-time guidance on market conditions, helping you identify when corrections are developing and when new uptrends are beginning. You’ll learn to recognize the subtle signs that separate temporary pullbacks from serious corrections, and most importantly, when it’s time to get back in.
Our weekly analysis covers market psychology, risk management strategies, and the critical timing decisions that can make or break your performance during volatile periods.
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