← Glossary · Risk and markets
Panic selling
Selling out of fear during a sharp drop, often close to the low.
When prices fall fast and hard, many investors sell out of fear of further losses. Because many do this at once, the price falls even faster; often this phase marks the low, after which prices recover.
Having a plan with fixed levels, deciding entry, target and stop before buying, makes it easier not to decide on gut feeling in such moments. That is the idea behind DipCatcher's fixed trading levels: decide calmly rather than react in a rush.