HAVE A MARVELLOUS WEDNESDAY

WHY PEOPLE LOSE IN TRADING ? - CONTINUED

It is only and only due to lack of knowledge of technical analysis. If you are aware of resistance and support levels of that particular script, you may not have gone for a long trade at a higher price, instead wait for level to come to enter into a trade.

In each market, price is determined by the buyers (the bulls) and sellers (the bears). If there are more buyers than the sellers, price tends to go up and if the sellers dominate the market, the price tends to go down. But in case of intra day, it is impossible to know who is going to rule the market for that particular day, whether bulls or bears. And lack of this knowledge leads you to losses.

In short, you earn little & little, but lose more & more, this practice ultimately reduces your capital to a great extent.

Just watch the following chart, and ask yourself, whether you are practicing this or not…..?

In fact, in case of intra day trading system, profit can be earned only if you have enough capacity to judge the intraday market trends. And you have sufficient positioning capacity. Intra day trading in smaller quantity with expectations to make huge profits is not possible at all. And intra day trading in bigger quantity involves huge risk. This is so because in case of intra day trading you have to collect little little profits and hence quantity has to be kept bigger, smaller quantity gives you profits, but in total it will look too much small and negligible considering your expectations.  In short, to earn to the level of expectations, one is required to enter in to intra day trade in big quantity with big risk involvement.

If you really want to earn huge profits with limited capital requirements, with limited risk involvement, you must be equipped with

-        an efficient trading system,

-        an efficient money management

-        an efficient trading psychology.

And all these three components are too much important that if you are missing any one, you may have to face struggle in trading.

In stock market, trades can be done intra day or positional. If you are capable of devoting enough time to sit before the terminal, if you are capable of trading with right positioning, if you are capable of judging daily market trends efficiently, then and then you should accept intra day trading system, otherwise should remain positional trader. All the above mentioned three components can be easily adopted, if you remain positional trader.

Big big money can be made with low risk involvement, with limited amount of investment only in case of positional trading system, and more particularly in swing trading system having enough knowledge of technical analysis.