Frequency of stock price checks that separates winners from losers
Hello, this is Gesho Yamashita.
“I wonder how many COVID-19 infections there are today.”
As anxiety grows, checking the news
may be a daily routine for many people in the workplace, don’t you think?
“Huh, so many?”
There are days when I am surprised and feel uneasy,
and that isn’t rare.
On days when the number of infections rises sharply,
the news reports
“What, this is bad!!”
and there are street interviews with young women saying things like …
This tendency to chase numbers, what do you think about it?
Needless to say,
what meaning is there in persistently chasing the daily new infection numbers?
At this time, whether the new infection numbers
are 300 or 500,
you should still be careful to avoid infection,
and you should be no different from others.
“Today the new infections are
a little fewer, so I don’t need to wash my hands.”
“Today there are fewer infections, so masks aren’t necessary.”
That’s not how it should be.
Of course, numbers help us grasp the situation,
but they are only a rough guide,
and every day fluctuations of 10 or 100 people
and the tendency to swing between joy and despair is not healthy.
Between tension and relaxation, our emotions are shaken,
and our minds simply become fatigued.
If you want to live a truly healthy life,
you should also try to shut out
unnecessary information as much as possible.
Even if you follow daily COVID-19 new infection numbers,
you won’t become healthier.
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Mental fatigue
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I was thinking,
to swing between joy and despair over new infection numbers
is the same as
checking stock prices daily and swinging between joy and despair as a stock trader.
What fate awaits such stock traders?
I have met thousands of individual traders, but
“Today it went up!
Today it fell... (tears)”
is how they tend to be driven around,
and there is no future for traders who are pulled by the market.
Not a single person remained in the market.
The feeling of worrying about the stock price
is not uncommon, but
swinging between outcomes for things you cannot control
is a hundred harms and no benefits.
It fatigues the mind.
When the mind is fatigued,
self-control weakens.
For example, when extremely tired,
giving up cigarettes, alcohol, or meals you love
is very hard, just as
when the mind is fatigued,
self-control ceases to work during trading.
As a result, you break trading rules.
And you lose important funds.
Thus,
habits of being emotionally unsettled about things you cannot control
rob you of what matters most to you.
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Purely looking at numbers is harder than you think
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“The弊害 of chasing numbers”
is not only mental fatigue.
“Numbers that you compare against can change your viewpoint.”
That is,
let me explain.
In a street interview,
someone said, “If the new infections were around 100, it would feel small.”
And when asked now,
even with the same number, 200, people feel anxious
differently depending on the context.
For example, in February this year,
they might have said, “Daily new infections are 200.”
That would have caused concern.
But now,
they say, “Daily new infections are 200.”
Even so, the anxiety isn’t the same.
In the end, the key in looking at numbers is
not the numbers themselves but the comparison.
Yesterday: 250
Today: 300
And
Yesterday: 50
Today: 300
Then even same “Today: 300”
feels completely different.
The stock market works the same way.
Yesterday’s Nikkei average: 23,000
Today’s Nikkei average: 20,000
and,
Yesterday’s 20,500
Today’s 20,000
even with the same 20,000,
the feeling differs greatly.
Purely looking at numbers is very difficult.
There is an “bias of comparison.”
Every day,
as you watch numbers fluctuate,
your sense of big vs small numbers dulls,so you must consciously keep that in mind as well.
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Stock price checks should be done once a day
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Now, finally
based on what we’ve discussed, about stock trading.
If you’re not making a profit,
you should reduce how often you check stock prices.
“Mental fatigue”
and
“comparison bias”
to avoid them.
If you keep watching price ups and downs,
you will be unsettled by even small movements,
and your mind will fatigue.
Your vision becomes extremely narrow,
and you cannot judge whether the current price is high or low.
As a result, you might trade on baseless short-term reasoning
like, “Compared to earlier, the price dropped this much, so buy!”which is risky.
To be frank, for beginners,
seeing stock prices once a day is enough.
That’s the kind of trading you should aim for.
Some beginners start day trading or scalping
and trade many times a day,
but that is dangerous.
Even in our Stock Academy, we teach day trading,
but that teaching assumes you can profit reliably with one trade per day.
Trade confidently after you’ve built experience and profits.
Thank you for watching until the end today as well.
Keizo Shimoyama
