Excitment on falling prices

              I become more and more excited every time the markets drop. No, not because I am
short the market, but because there is opportunity developing in the markets. One of
the biggest differences that I have noticed since trading successfully (vs.
unsuccessfully) is the excitement that I feel when the markets begin performing poorly.
When I first started trading, I would find myself disappointed when the markets
performed poorly and gleeful when the markets were rising. It only makes sense.
When the markets were rising, I was making money; I was hopeful. I felt that there was
more to come, and I would often buy more positions especially since I found myself
having more buying power during these periods. Then, out of nowhere, the markets
would begin to fade, and I would lose my newly created capital. Often, I would lose
more on the way down then I made on the way up. Certainly this was because I had
more capital invested on the way down. If this sounds familiar…it is time to change.
The first thing to understand is that the more risk that is involved, the more discounted a
position is. You get paid to take on risk. This is essentially how markets work. When a
stock position goes down day after day, it is “risky” to enter the position. After all, you
do not know when it is going up. Once it begins moving upwards–then, we all feel more
comfortable (it has started going up, so there is less risk of it going down–the
downtrend has broken), but we now must pay a higher price. Some people feel that it
must go up over several days and clearly break itsʼ downward movement (more safety,
less risky). Unfortunately, once the stock is much safer, it is also more expensive. And,
those that had taken on the risk are now paid (to sell it in the safer, less risky
environment).