There is no doubt that people enjoy being right about things. But sometimes more than the joy of being right, people are terrified of being wrong.
People will often lie to support an argument even though they may realize that they could quite possibly be on the wrong side of the matter. It’s usually not that big of a deal. Rather, it’s expected human nature; we don’t want to be wrong.
However, the need to be right can be a big deal when it comes to investing. Not surprisingly, many traders and investors will attempt to hide their losing moves as best they can. Even worse, when a stock moves against them and they start losing money, they hold the stock in hopes of winning back their losses, even when it’s obvious the stock is tanking. Subconsciously, and even sometimes consciously, they don’t want to accept the possibility that their analysis may have been wrong.
I think we all have been there at some point in our trading career.
The best way to combat our natural desire to “not be wrong” is to always be right. I know this sounds a bit crazy but hear me out. The reason so many traders get into trouble is that they expect their stock to move in only one direction, when in fact, a stock can move in either direction at any time, regardless of how accurate we think our analysis might be.
Instead of making a single prediction about a stock, you should try to define your expectations and predict responses to every possible outcome. So, after all of your painstaking analysis, you can be comfortable and ready to act no matter what happens post trigger pull. With this approach, it won’t matter which way a stock moves because you have prepared for it. There will be no need to worry about entering or exiting a position because our analysis will always be 100% right.
