Stock Market Going Down !!! What To Do???

Yesterday, the stock market in every region is red (going down). The Composite Index for KLSE (BSKL) is sitting around 1515.  The price of almost every stock is going south. What has happened to the world market just now. According to expert or analyst (something they call), the reason for this going down was uncertainities in political aspects in Bahrain and Libya. This 'political situation' has raised the world oil prices and hence increasing the expenditure of company which affect it's profits. So...simple to say, the stock price is going down because of this 'political situation'.

I was very excited when this happened. No, no, no... I don't mean 'the political' but the stock market. When the stock market is going down, it's make one more oppurtunity for me to 'train' my emotion to stay calm whatever happens to stock market. Arrgghhh...I can't write properly just now. There was many things in my mind just now (I think I can't write a book now). Actually, there were many books out there writing about
controlling your emotion regarding what happened to the market.

Actually, this uncertain has create an oppurtunity for us as investor/traders.  
Yes, this is an oppurtunity!!!

So, how you can use this situation to your good rather than following the crowd to get panic and selling off all their stock (this is a called 'herd'). There were some action than you can take

• Don't take any action

This is my favourite act when the price going down. Actually, if I have a cash I would buy more the stock. Why??? Because I know this uncertain only will be temporary and if the company's stock that I have buy is strong and solid, the market will realize it sooner or later. Yes, 'less is more'.

• Set a 'cut-loss' or 'trailing stop' price

I think this is suitable for trader or an investor who has low-tolerate about the market. You can simply put 10% cut-loss or 3%-5% trailing stop to your buying price. It will protect you if the price is going down for more and more and the market take more time to recover.

• Short selling

Only for advance trader/investor. Not recommended to new investor as you may going 'broke'

Maybe, there are other ways to respond to this situation but remember to take this as an oppurtunity. Don't let your emotion control your. You must control your emotion.