| If you are a new player on the stock market, you | | | | that this price drop is only a natural thing to happen. |
| should know that things aren't always nice and shiny | | | | This kind of traders is losing money as the price is |
| when it comes to stock trading. There are downsides | | | | lower than the one they have paid for the shares. |
| and upsides as in any other trading or investing | | | | This is the reason why you should try not to panic |
| process and you have to be prepared to cope with | | | | and to commit yourself to holding to your shares. |
| the negative aspects. The drawdown is the worse | | | | Keep in mind that this price drop is a normal |
| thing a stock trader may experience along the years. | | | | phenomenon on the stock market. |
| You should know that a peak in a share's price is | | | | Experienced traders have a strong commitment |
| always followed by a going down to the bottom | | | | when it comes to a drawdown. They know that the |
| period. But don't panic, this negative impact is also | | | | best thing to do when a drawdown occurs is to |
| followed by an ascending trend, so your shares will | | | | follow all trade recommendations. Anyone who is |
| be going up again. | | | | involved in stock trading should be emotionally and |
| Experienced systems traders are well aware of this | | | | financially prepared to deal with this kind of negative |
| drawdown trend; the 'rookies' (new traders) are | | | | situations. Experienced traders know that the worst |
| those who panic and start selling their shares. This | | | | thing to do is to sell your shares just after a |
| drawdown period represents an important | | | | drawdown as the price will definitely go up. |
| percentage of the stock's profit evaluation process. | | | | Therefore, if you plan to get involved in the stock |
| This drawdown curve is representing a test for the | | | | trading process, be prepared to face its downsides |
| 'buy, hold and hope' rule that investors should follow | | | | too. And keep in mind that any investing process is a |
| on the long term. What does this mean? Well, | | | | matter of instinct, trading method, good information |
| inexperienced stock traders chose to sell their shares | | | | and luck. |
| when their price is going down, instead of realising | | | | |