Trade The Journey

Trade The Journey

Should you Constantly Check your Investment?

Riding with my mother, I was telling her about one of my recent stock trades that did not pan out well? I spoke of how I continued to check my investments throughout the day and began to become concerned with the movements of the stock. The stock was poorly placed and within the weeks coming, rebounded with such force, it crushed my option position into pieces.

Although, I have proceeded further in my understanding of investing and finance, my mother retained her wisdom of experience as an advantage in the conversation. She remarked that checking your stocks consistently is a recipe for disaster and they recommend that you don’t. It made me think of the positions in the market I had opened and closed. Is there a hard rule for checking your stocks?

I honestly would have to say that it depends on your position. If you’re holding a  long-term investment and it may not be as important to check your stock daily. But what if the position you hold is leveraged and the movement of the market can wipe your financial security in a matter of minutes. I would like to think that there is always a bend in the rule. However, checking your stocks consistently can be a recipe for disaster especially if you are emotionally involved.

Trading in the zone spoke of maintaining a zen-like mindset when trading in the market, allowing you to remain reflexive in your position. If you are able to maintain this mindset, does matter if you check the market consistently? Its hard to say, you’d have to maintain that zen-like mindset throughout the day as continually check the market. Extremely hard to do.

So what is the correct way to go about checking your investments? My opinion is that it depends on your understanding of investments and how liquid the market you are trading in is. I think that you have to find your own schedule for checking stocks. I would also say that your due diligence should provide you with enough confidence to give the investment the freedom to prove you right or wrong. It is recommended that you do not check your stocks often.

There are tools that can help you with this like, a stop loss or stop limit if you don’t have time to watch the market consistently.

Thoughts?

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