Six reasons why a beginner loses in stock markets
All of us know most traders quit their trading journey early on, as they cannot make profits. Leave alone making profits, the fact is that they lose large sums in the start-up phase of their trading journey. Here I have listed 6 primary reasons why beginners lose:
1. Intra-day Trading: Beginner mostly starts with intra-day trading as they are made to understand that intra-day trading is the easiest way to earn daily money. There are other reasons for starting with intra-day trading like added leverage (limit) and no risk of carrying positions. What beginners do not understand is that intra-day is one the most difficult part of trading. One needs to have a lot of knowledge, practice, daily study, decision-making ability, mind control, fast entry and exit ability, discipline, etc. It takes a lot of time to develop these qualities.
“Do not start your journey with intra-day trading.”
2. Trading based on news from multiple sources: Beginners tend to trade markets based on news from various sources like TV, Newspaper, friends, brokers, etc. Avoid it. Learn and do your own analysis.
“If at all you want to follow – then follow only yourself.”
3. Trading with Leverage: Trading in Futures and Options is one of the biggest and primary reasons for losing money in markets. It is like taking a loan to earn interest. Futures and Options trading requires a deep understanding of the risks involved.
“Don't trade in F&O unless you thoroughly understand the dynamics.”
4. Trading for 'doubling' investment in a very short period of time: It is not easy to double your investments in stock markets even in intra-day trading, though prima-facie it looks very easy.
“Have small targets, to begin with. Then scale up slowly and steadily.”
5. Over-trading: Most beginners over-trade as they do not have defined trading framework of their own. They over-trade when they make profits and thus lose whatever they had earned. They over-trade when they lose, to make up for what they have lost, and thus lose more.
“Have defined trade plan - don't over trade.”
6. Lack of knowledge: Many traders begin trading just because someone has forced them to open the trading account or they just want shortcut way of earnings. They do not learn the in-outs of trading before they begin with.
“Learn Learn Learn”
There can be many more reasons apart from these. However, I feel primarily these are the mistakes, which, if avoided, newcomers will sustain these markets for a long time.
Contact: 9975285231
Email: rajputsagar111@gmail.com
WhatsApp Intraday Calls: https://chat.whatsapp.com/E2phy1bUjp5DjDXzUhnUy2
Disclaimer: The contents produced here are
purely for educational purpose. They should not be construed as buy/sell
recommendations. I am not a SEBI registered Analyst or Investment Advisor.
Readers are advised to consult their Investment advisor before taking any
decisions based on the above write-up.
No comments:
Post a Comment