Losing Trader: Top 10 reasons
1. Trading based on Hunch feel: Trading randomly based on tips, the Gut feeling is suicidal. You are relying on the luck. You enter and exit the position based on your hunch feeling.
2. Lack of back-testing of the new strategy and overconfidence on it: Imagine a doctor who has never done a surgery in his college life and you are his first surgery patient. I think you got my point :).
3. Unrealistic expectations: You think you can become a millionaire overnight or within a month. Yeah! Keep dreaming.
4. Not heard about ” Never keep your all eggs in a single basket”: Always keep backups.
5. Self-ego and over-smartness: This happens with everyone, Right? You believe that Heard on Street (HOS) SMS you received was only delivered to your cell phone and you should make full use of that insider information.
6. Prediction Baba: Prediction is so fascinating. We love to predict everything. In fact, it’s our favorite time-pass. We are super-humans and we can predict exact tops and bottoms, that too only with our gut feel.
7. Trading, like on a suicide mission: You believe in Do or Die. No half measures. Please, keep patience, markets are open for the lifetime.
8. Booked Profits too soon and Holding losing positions forever: You are too afraid to book losses. You can wait as there is no harm in it. It cannot go below zero.
9. Holding stocks from the same sector: you are too confident on a particular sector and do not believe in diversification.
.10. Trying different trading instruments without knowledge: One of the major reasons of some new traders losing money. They start trading in Futures and options, They are unaware of big risks and they quickly erode their Capital. So as a new to share market, Cash should be preferred. Mistakes like these can be very fatal. Read how a trader lost 24 lakh in 5 minutes.
If You do not want to be a losing trader, Just act opposite to the above points.