WHY PEOPLE LOSE MONEY IN STOCK MARKET

Have you ever heard about the stock market that “Investing or trading in stock is just like gambling”? You may hear that many people lose their money in stock market but have you ever asked them how they lost their money. Were they educated enough or have knowledge about stock market? Were they following rules of disciplined trading? If you asked them, most of answer will be “No”. This is because people have misconception that their friends earned lots of profit and they can also earn easily but they were not aware about the reality of the share market.

Here are some common mistakes most of the people make while doing trading which can be major reason for losing money in share market.

·         They are not aware about the rules of trading or disciplined trading

·         Most of traders are greedy and want to earn money only in one position

·         Traders got emotional with their position or loss incurring by them in particular position

·         Most traders do not book profit and do not place stop loss

·         Many stock market trader expect 100% reward in minimum period of time i.e. 10-30 days

·         They never heard about the Risk & Reward, they only heard about the Reward only

·         They only know that how much limit broker can provide but don’t know the consequences

·         Start trading with very less amount of capital and do not stop trading until they lose their entire capital

·         Many traders use margin or limit provided by broker on his capital. This could be 5-10 time or more. Traders think that using broker’s limit; they can earn more profit but don’t think that if position incurred loss then they will lose 5-10 times.