How to Overcome the Fear of Correction or Falling Market?

How to Overcome the Fear of Correction or Falling Market?

1. First you define you are a trader or an investor.
2. If investor then define each of your stock holding with a holding duration or an upside target price or both.
3. If you are a trader trade on both sides, don’t become a bull-trader, or a bear-trader. Some of our viewers sent us mail that ‘what’s wrong in being a one-side trader, one can be either a bull-trader or a bear-trader and still earn’. I agree, but then there will be a lot of practical issues. What would you do in case of all round short term or intermediate market correction if you are a bull trader and vice-versa? Would you be able to control yourself and remain on the sidelines for days, weeks or months?

Apart, in reality being a trader and preferring only bull or bear side is in fact a bias. It is a liking, so it is a bias. So that is why to excel in trading you need to learn to short as well.

This type of readiness and experience also overcomes the fear of correction or falling market, because you ‘know to profit from declines, and you eradicate the fear or loss by going only and only long while whole world is selling’.

4. Days of high volatility and swings on both sides are very less so this is also a relief.
5. Don’t hesitate to change your stance. If you think it’s a SELL and you told everybody a day before it’s a BUY then you would fear others undermining you. Remove this fear.

Very less people know that George Soros, considered world’s biggest trader-one day told his friend that he was short on a commodity. After some days the friend met him and told Soros that as the commodity price rallies his company must have lost millions. Soros replies he reversed his position and went long and made a huge killing.

But this doesn’t mean that you frequently change your mind. You have to find that optimum line of balance.

6. Follow value investing. This is a bullet-proof investment strategy.
7. As an investor, accept market is also made of speculaton and trading interests. Don’t benchmark your investment stock shouldn’t fall below so and so price. Remain ready for ups and downs in your share price. Don’t check the price daily. Review once in a month or in a quarter only.
8. Traders can hedge. If you are uneven about the market or don’t like corrections. Then buy index put options. Or you can also trade with ‘Pair Trading Strategy’ where you buy some counter and at the same time go short in others. You decide this on the basis of several methods such as sectoral analysis, performance cycle analysis and so on.
9. If you are a Delivery based/positional trader then keep cash in times of high volatility and uncertainty. This cash can help you take position in case market correct. 
10. Bull markets don't end easily and Without witnessing exaggerations and extreme euphorias. Similarly bear markets don't last much longer. This is not a rule but is an established fact with few exceptions.
11. If you have hired tips service of some analyst, and he is not able to give sell calls in a bull market or buy calls in a bear market then change your analyst.