Logical Investor & Trader

Saturday, April 3, 2021

Why are people not able to make money in "Stock market" ? How can you recover your loss ?

Why am i not able to make money in stock market ? How can i recover my loss ? Stock market, Technical analysis, Fundamental analysis, Invest, Investing, Investment, Trading, Day trading, Intraday trading, Positional trading, Swing trading

I will list various reasons talking about "Why people are not able to make money in Stock market" :

Following someone else's advice, news, tips, portfolio. These things do not give you an opportunity to learn anything "Practical & Valuable" that will help you in your journey as an "Investor or as a Trader". The first thing that we need to accept is that there simply "No shortcuts" & "No easy way to make money".

"Fake educators/ Market experts". There are no "Experts" in the Stock market, if they really were an expert then they would have been sitting alongside "George Soros" and the likes. Hitting it big as a "Speculator" is also not everyone's cup of tea especially for people who lure beginners by saying that the market is "Over-bought" or "Over-sold" just on basis of a silly bla bla "Indicator value".

Not being aware of "10 basic Behavior finance biases" namely Confirmation, Information, Loss-aversion, Incentive, Over-simplification, Hindsight, Restraint, Bandwagon/ Herd mentality, Neglect of probability, Anchoring.

Not understanding "Fundamental, Technical analysis & Cardinal rules of Investing & Trading". However, i would like to add that it is better than learning from any self claimed "Market expert or Educator who had made some money by accident and is now teaching others".

Not doing any Due diligence or Research about "IPO's".

Getting stuck in "Low liquidity" stocks being managed by "Operators & Manipulators".

Not knowing "What to do when market is Choppy/ Range-bound/ Consolidating". It eats whatever Profits you made in a period of few months when the market was "Trending".

Operators use "Pump & Dump" strategy, spread rumors, hit the "Order-book", Tie-up with promoters of "Lesser known companies", Hire "Technical analyst's" of their own who tell them where the stop-losses could have been placed and how general traders can be trapped.

Buying shares at high value in "Greed" & selling at lower value in "Fear".

Not riding the trend with "Trailing stop-loss". Due to this people tend to book profits early.

Averaging a stock which has bad fundamentals and whose price is continuously falling.

Not following proper "Risk management & Position sizing".

Taking a risk of more than 2 % per trade which blows your trading account fast.

Not planning "Exit" before "Entering a trade".

Leveraging, taking positions on margin without having enough capital.

Trading in "Futures & Options" without adequate understanding.

People borrow money to "Invest & Trade", it should be avoided at all cost.

Not focusing on "Financial planning, Over-relying on Indicators, Not focusing on broad market sentiment, Price action, Market data & Institutional activity".