Seriously, why when we do actually hit our buy targets, the stock will most likely continue to fall? Well it requires more than logic to crack this mystery but I intent to share my take on the matter. Hopefully, more people will realise that it is not always a bad thing to experience such phenomena and how should we accept such things from happening in our investing journey?

Support turns to resistance

Let’s get the obvious off the table, we usually aim to enter at a support simply because it is most likely to bounce from that point. In fact, we might even increase the entry price a little to ensure that we do not miss the purchase. That said, buying at a support is always risky if that support level does not hold. We just need reminders on why this happens when it happens.

You only remember when it hurts

Our minds are good at pointing out events when it hurts. This is something that will never cease because as investors, we are idealist to say the least and we just want to get the best price in and on the way out. Conversely, when things do not go our way we will start questioning ourselves on how we can do better next time.

We have probably relied on the wrong support line

Let’s be realistic, there is no only 1 support line so its perfectly normal for us to rely on the wrong one. If you would have wanted to prevent this from happening and chose the thickest support in the monthly or quarterly chart, you will probably miss all entries and only strike the price in a crisis. No shade to that strategy but not everyone can afford to be that patient as a trader.

Closing Thoughts

Just wanted to do a quick post and share my thoughts on this weird but recurring theme in my trading and investing journey. Thought that if I can state the obvious, I will then be able to remind not just myself but others as well.