3 Productive Routines To Implement During A Market Correction
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 I will discuss some of the best techniques I 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.
- 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.
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 an updated list of the strongest stocks for when the next uptrend gets underway. These are typically the leaders of the ensuing uptrend.
- 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.
Always remember, not losing money during the times when the market is in a downtrend makes a huge difference to your performance over time.
Mentored by the founder of CANSLIM Ross Haber leverages years of experience identifying winning stocks and is well versed in recognizing the ones that outperform the general market. He now brings this experience to help you identify these stocks in each Top 10 Report.