You think the market has risen too far too fast and is due a pullback.
The conundrum.
How and when do you decide to get back in?
The Psychological Challenge
The market starts breaking a little. Hope rises. It is moving your direction. You don't want to jump in too soon. After all you have been short and patiently waiting for this for quite a while. You don't want to waste those missed opportunities (now sunk opportunity cost) by blowing your powder too soon and seeing it pan out in the fashion you envisioned all along. On the other hand, you have been in this position before on the run-up, failed to cover or buy the dip, and seen it tear off again, only to have to chase (or worse fight a losing cause).
There is no good answer to the question. Doing your due diligence. Setting price levels and being disciplined. Having a system, a process, and a philosophy. You're not going to win them all. But you do want to have a system or process in place where you put the odds on your side when you go to bat.
No comments:
Post a Comment