Why are people losing money in online trading?
There are people who make millions trading online while others go bankrupt. The following is a list of common mistakes that a loser makes that separates him from the winners
1. Trading base on tips or guru tips – That is what I called blind trading. If everybody can make money in the stock market by guru tips, then nobody goes to work. You have to learn about the stock market and trade on your own. Never trade solely base on tips from others. Always do your own research on the stock.
2. Never learn from mistake – Stock market is all about learning. If you are not learning from your mistake, then you will keep making them and the result is losing money. For beginners, I suggest you to keep a trading journal that logs your winning trades and losing trades. Try not to make the same mistake twice.
3. Constantly checking your account balance – This is very important. If you are going to freak out if you see your money dropping in your account balance, you should set stop losses and stop checking your account balance. People make mistake when they are not thinking strict or when they are under pressure. You should have a trading plan before you buy any stock. Calculate the amount of money that you tolerant to lose on each stock and set your stop loss.
4. Get rich quick – If you are thinking to get rich quickly trading stocks, then trading is not for you. You should focus on learning. The more you know about stock trading, the more money you make.
5. Not following your rules – You should always follow your trading rules and try not to break it. If you don’t have trading rules, then stop trading.
These are the most common mistakes that I see traders make.
“If you are going to freak out if you see your money dropping in your account balance, you should set stop losses and stop checking your account balance.” Couldn’t agree anymore,this is one of my worst mistake.I never set up stop loss because I thought I can control when I want to sell. However,when that stock keep dropping,I was scared to watch it,and just left it until lost bigger.