1, the wrong idea, thinking that the stock price will rise back if it falls. Traders believe that it is normal for stock prices to rise and fall, and when they fall, they will rise back. I never thought that some stocks would be stormy or delisted, and the stock price decline would never return.
2, lack of awareness, can not correctly grasp the stock price trend. Due to lack of cognition, traders can't grasp the trend of stock price operation, so they can't identify the stock price in the downward trend and make a correct judgment. The stock price is in a downward trend, and it is difficult to reverse the running trend of the stock price in the short term. Failure to sell will only cause greater losses. Only at the end of the downward trend,
3. Risk awareness is weak, and there is no concept of stop loss. Many retail investors have no risk awareness and do not know the stop loss. They think that as long as they don't sell, they are just floating losses. If you sell the stock, it will cause real losses.
4. I don't admit defeat and always want to earn back the money I lost on this stock. Some retail investors think that they are no worse than others, others can make money, and they can also make money in the stock market. They must earn back the money they lost on this stock.
5, stubborn, do not believe that their judgment is wrong, firmly believe that there will be a big market in the future. I think the stock I bought is correct. The current decline is only temporary, and the stock price will rise in the future.
These factors make traders unaware of their mistakes and will not correct them. On the contrary, it will take the wrong measures, such as covering positions and copying the bottom. Retail investors will feel that the stock price is cheaper because of the decline in the stock price, and think that covering the position will greatly reduce the cost of holding positions and go further from turning losses. In fact, it seems to reduce the cost, but it does not solve the problem. The decline of stock price has caused greater losses due to the increase of positions, and it has gone further and further on the wrong road.
The reason why retail investors don't want to sell when the stock price falls is to make up for the bottom, which is the limitation of retail thinking. The thinking of retail investors has been thoroughly studied by the main force of the market, grasping the characteristics of short positions and bargain-hunting when the stock price of retail investors falls, and harvesting retail investors wantonly.
If retail investors don't want to be harvested by the main force, they should change their ideas and break through their thinking. Second, we should arm our minds and enhance our cognition. For example, if the stock price falls, the correct way is to stop loss, avoid risks, and then switch to strong stocks. Changing one share to make money makes up for the previous losses and also solves the problem of losses.
Just because of the cognitive limitations, retail investors will think that I may not make money by changing a stock, so I might as well stick to it. In this way, it has fallen into a vicious circle that can never be broken. Stay put, don't make progress. Perhaps this is the root of the loss of retail investors in the stock market.