When a professional trader is faced with a stock dropping in price when he believes it will eventually go up, what does he do?

Most people would believe that if one is confident that a stock will eventually rise, they should hold on to it. In fact, they should buy even more. It’s cheaper than ever. Selling it would be due to emotional fear, and a smart trader would stick it out.

But the reality is that the emotional play is holding on to belief. Because when all technical indicators are showing a stock is dropping in price, that is the true reality. The faith of it going up is simply a story one can tell themselves. And can also cost them.

How often do we see our own investments fall short of our expectations? Whether it be time? Money? Relationships? The easiest thing to believe is that we should stick it out. And sometimes we decide to push ourselves deeper, thinking it’s too important to us.

That doesn’t mean quit when things get rough. But it’s good to recognize when our stories are blinding us from the direction our actual indicators are pointing. It might be the smarter move to reduce your investment, not increase it.