I’m sure everyone out there has a story to tell about their friend or relative or someone they know of who has lost their money in the stock market. This perhaps might be holding you from entering the world of stock market trading.
So today I will tell you why people lose money in stock market.
People have a misconception that stock market is a place to make quick money. This is just not true! It is an area that requires skills, patience, and smart work. It is not a place where anyone can come, make money, and go.
So next time if you hear somebody who has made losses by trading, then don’t just blindly take their opinion. Instead, ask them the following questions:
- What preparations did they do before entering the stock market?
- What did they actually do to lose money in stock market?
- How did they decide on the stocks to be picked for trading or investment?
- How long did they trade in the stock market?
Chances are that they might have committed any of the common trading mistakes that we are going to discuss below.
Why People Lose Money In Stock Market?
Here are 4 main reasons why BEGINNERS lose money in stock market.
People don’t understand the winning strategies. Most of them do stock trading based on mere hearsay. It’s all about thinking logically, taking calculated risks, and making informed decisions.
Trading in stock market is both an art and a science. You have to learn the skills of trading and then you have to perfect them with practice. There are different strategies for trading in different situations. Entering the stock market without mastering them is like entering a war zone unarmed and unprotected.
Most losses happen because of impatience. Losing is part of the game. Don’t panic or act hastily when you lose. Just hang in there! Don’t give up! And stick to the basics.
All traders – whether beginners or experienced – will make losses at one time or the other. No one is ever going to have 100% success. It is a mixture of winning and losing. What you should be doing is to look at the net results. For instance, if you make 10% loss in one month but makes 25% profit in the next month, then your net result for the 2 months taken together is profit. So the key here is not to quit!
Don’t fall victim to your emotions. Make informed decisions based on logic. Don’t overtrade when you earn big. Act wise.
Trading is not an emotional game, it is an intellectual game. It is natural to feel fearful after consecutive losses and complacent or overconfident after consecutive success. Identify and overcome these emotions.
Don’t overtrade when you start making gains. If you do that, chances are that you will be wiped out of the game. Trading is not magic; it is all about analysis and making the right move at the right time. So every decision that you take – even when you are gaining high – should be based on statistics, stock market trends, and logical thinking. If you do this, emotions will not take over you and you will not lose money in stock market.
Pick your stocks wisely. Don’t put all your eggs in one basket. Build a diversified portfolio. Ensure a balanced mix of assets.
People do not know how to select a good stock. You have a variety of stocks to trade in. Therefore, simply knowing how to trade is not enough. You should have that ability to pick the right stocks at the right time. You may do this after careful analysis. One main reason why some people make incredible gains while others struggle to make decent money is that they know what to pick and when to pick.
Sometimes Even Experienced Traders Fail …
However, it is not just the beginners that make mistakes. Even experienced traders make mistakes that make them lose money in stock market.
Why is it so?
Here are 4 main reasons why EXPERIENCED TRADERS fail in stock market.
Amateurs do indicator-based trading. What they don’t understand is that all indicators are lagging. Professionals move before indicators move.
Most amateurs rely heavily on technical indicators. Moving Average, MACD, RSI, Ichimoku, etc. are some such indicators. Amateur traders take entry when these indicators ask them to do so. However, what they don’t understand is that it is the price of the stock that moves first and not the indicators! Therefore, those who do not follow the movement of price can end up with losses their trading activities. Hence, if you want to make good gains by taking good entries, then I would advise you to rely on strategies like price action trading.
Amateurs take inaccurate entry and exit decisions. Amateurs buy others’ opinions while professionals determine by themselves the entry and exit points.
Early bird catches the biggest worm. By the time the analyst voices his opinion in TV, the price of the stock might have already gone up. Thus, the trader loses to gain big. What you should do is to learn stock chart reading and determine the entry and exit points by yourself. If you learn chart reading, then you can define accurately the entries, exits, stop losses, take profit, etc. The price and value of a stock are never one and the same. So if you want to be a successful trader, you should learn how to assess the price and value of a particular stock and then take accurate decisions.
Amateurs do not understand the game of money management. So they often lose the profits they’ve made in their previous trades. Professionals sustain the profits they’ve made from previous trades.
Having a vague idea about trading strategies is not enough to make profit from stock markets. You should have a good understanding about money management and risk management. You should learn to analyze whether the trade is worth it, what’s the proportion of capital you should invest, etc. These are the topics that I teach in my stock trading course. I also make use of a proprietary software that my team has developed. Join me and I’ll teach you how to use this software and keep losses at bay!
Amateurs lack the gift of intuition. Mere gut feelings won’t work; professionals rely on ‘processed gut feelings.’
Most traders make use of intuition in one way or the other. However, this method will work only if your intuitive decisions are based on sufficient knowledge. I’ll help you to develop this gift of intuition. I know the secret – I know why and how intuition works in stock market trading. There are several reasons, but I will share you one here – your intuition is mainly based on what you understood about stocks previously. It is a combination of scientific knowledge, accurate information, and past experiences. So if you want to become a better intuitive trader tomorrow, change your understanding today!
I can make a long list, but these are the worst mistakes that most people make. If you can nail these things, then you will make a lot of gains from stock market.
Make It Your Career
Therefore, I would say that stock market is the most rewarding career one can hope for.
- No exorbitant fees. Your investment on education is less. Now you can master the art of stock trading at an affordable price.
- No long waits. You don’t have to wait for decades to get a high pay cheque.
- No limit to earning. There is no limit to the returns that you can hope for in this career. The wealth that you can accumulate from this career exceeds all other careers.
So if you are someone who respects your money and value your hard work, then you should turn into stock trading. I will teach you how to
- build a rewarding career from stock market trading
- develop your intuitive abilities
- manage your money and risks better
- determine the right entry and exit points
- move before any indicators move or analysts voice their opinion in media
Join me in my master mentoring program. What awaits you is an exciting career full of extraordinary opportunities and rewards!!
You are just a step away from take a vital new breath of your life. Click here and enter the new hub where you can master the art of money making.