Emotions are extremely difficult to control, and can be the cause of your demise in this business. Imagine walking down the street, and getting punched in the face by someone walking by. Now imagine just ignoring this incident, and not reacting and doing anything back. That is essentially the goal of the stock market. It is easy to say, “I wouldn’t panic and sell a stock when it’s down,” but the reality is not as easy.
When you have a lot on the line, like your job, your six figure bonus, your pride, you brain will tell you to react as your survival instincts kick in. I guarantee you, your first instinct during a big sell off in a stock you own will be to sell. Sometimes that is the right decision, but sometimes that is the worst decision. The goal is to train your brain to not react, and allow you to make a level headed decision.
The only thing worse than losing a lot of money on a stock you own, is panic selling it only watching it go right back up. It is like getting punched in the face, pushing the guy back and then getting punched again.