Why do 95% of people lose money in the stock market?


Why do 95% of people lose money in the stock market?

Actually it is true that 95% of people are losing money in the stock market. But what are those mistakes they do while trading in the stock market and lose capital? Here are some highlights of those mistakes:
  • Not Understanding Market Trends
People always lose money because they never understand the market trends or with which trend they should begin the trade.
  • Letting Emotions Guide Decision-Making
Emotions like fear and greed should never control your investment and trading. Greediness and fear both can spoil your trading pattern and portfolio too.
  • Wonder to Getting Rich Quick
Some traders and investors lose money in the stock market because they think stock market is a money-making machine. With this mentality to become a millionaire in a day or two, no one can get returns in the stock market, instead, they lose money.
  • Lack of discipline in trading
There is no boss for you in the stock market that doesn’t mean you will trade in any random manner. Always do your homework by doing research and gain maximum information and always trade with discipline. Make your own principles to follow.
  • Not following stop loss
When price moves against your trade, don’t wait for the price to move in your favor. People often don’t like to place the stop loss. Always place a proper stop loss, accept the small loss, and immediately exit the trade.
  • Revenge on losing money
When traders lose their money at the beginning of their stock market career, they start trading more aggressively like they are taking revenge and again lose heavy amount.
  • Not to withdraw any profits
Many traders in the stock market whenever they make money, never withdraw it instead they re-trade with those profits and further lose all money including profits. Make habit of withdrawing your profit. – It will impact very positively on your trading skills.
These are the very common reasons all traders and investors do because of which they lose money.

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