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Do not Hold On to the Stocks for Too Long
It is worth noting that not all investors lose their money for picking the wrong
stocks. Some lose their money because they pick the right stocks but hold on to
them for too long. Do not underestimate the volatility of the stock market. Make
sure to sell your stocks before their price drops. Take your profit while you still
can.
 
Understand Volatility
You should have a right understanding of what volatility is. Many people think
of volatility as something where the prices of stocks simply rise and fall almost
randomly. They often think that after a big rise, then a massive fall can be
expected, and vice versa. However, this is not always the case. If it were so, then
volatility would be something that is easy to predict. The volatility of the stock
market is influenced by various forces. This means that even after a massive
drop in the prices of stocks, it is still possible that another drop will take place.
This also means that the result of a particular trade is independent of past trades
or transactions. Unfortunately, some people think that since their last three
investments did not work out, then it is most probably that the next trade will
end up with a favorable outcome as long as they use the same strategy. However,
this is wrong. In fact, there is a good chance that the subsequent trade or
investment will also be a loss. The reason lies in the strategy that you are using.
If the strategy keeps on losing, then it is a sign that you should change or at least
modify your strategy. True professional investors do not rely on mere luck. They
know that if they come up with a true winning strategy, then the chances of
raking in some profits would be high. Take note that even if you have a good
strategy, there is still a chance that you may lose an investment. After all, there is
no strategy that can guarantee 100% the return of positive profits. But, with
consistent research, hard work, and practice, you can tilt a favorable outcome to

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your side and establish a winning edge over the stock market.