Tuesday, November 11, 2014

HAVE AN ENTHUSIASTIC TUESDAY












WHY PEOPLE LOSE IN TRADING ?

Firstly, I would advise you to examine yourself about your own trading, examine the reasons why you are losing in trading.

Mostly you enter either buy or sell trade as per the tips you have subscribed for or from your friends or broker or from TV channels or newspapers, but never follow the tips in full and final way. What I mean to say you hardly use the given stop loss order for the tips got. Many a times you keep psychological stop loss means determine to cut your trade if the stop loss level arrives, but when the price moves to that stop loss level, you change your decision and determine your own stop loss level for that particular trade.

Many a times you enter a trade for intra day, but when price moves against your expectations not keeping stop loss, you change the term of your trade and become positional trader for that trade, and ultimately you become investor for that stock. And whenever price moves just a little bit higher or below your entry level, you forget your target set at the time of entering the trade, and you exit from the trade just to release your funds, earning minor profit. Again you enter for intraday trade and do the same mistakes very often. This process of changing from intra day trader to investor and from investor to intraday trader continues for a long time. Ultimately you cannot do your intra day trading nor positional trading efficiently due to lack of enough liquidity of funds.

Some times after entering into a trade without using stop loss tool, price moves against your expectations for such a longer period of time that you tired with that trade and cut the trade in a heavy loss.

If you use your stop loss tool without considering the daily volatility of the market, naturally it will hit very often resulting into losses.

Many a times, you enter into a long trade in script A without making any plan for that trade, and when price moves against your expectations, and at the same time you find some another script B with rising price, you are tempted to cut your previous trade in loss and enter into another long trade in the script B. But unfortunately what happens, you enter into long trade in script B at such a higher level that as soon as you enter in it, its price starts declining……again you find yourself in losing trade. You again cut your that trade making loss….loss and nothing but loss….And this continues for many a times.

Why does this happen to you….?
                                                                                                                                                                 (to be contd)




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