Why Do People Fail As Intraday Traders?
3 Reason to Avoid Day Trading Failures
“No lunch is free”, you must have heard the phrase. What does it mean? It means one must work hard to earn money.
The same is true with intraday trading as well. Many people start enthusiastically with anticipation of becoming rich overnight.
However, 90 percent of them exit within a few months after losing all the money they invested.
Why is there such an enormous percentage of failures?
It is because people don’t understand the rules of the game. Due to the haste of reaping huge profits overnight, they commit repeated mistakes.
Only those who spend adequate time in understanding the nitty-gritty of it succeed in the long-term.
Traders make repeated mistakes
In the intraday trading, everyone makes mistakes, but the novice traders make blunders. They believe in the tips sent by so-called investment consultants.
These tips are based on market speculations only, and there is no rationale. Hence, the stock prices do not show price variation during the trading session.
Since the stock must square up at the end of the trading session, there is no option than booking loss.
When it happens repeatedly, traders lose confidence. They start playing safe. It reduces the profit margin and loses the whole purpose of intraday trading.
Experts say that people having deep pockets should only choose it.
There is no point in trying it if the sustainability is low.
People don’t prepare for it
Another important reason for the failure is that people jump into it without any preparation.
They don’t study the market behavior. They don’t know the high and low of a stock. They don’t read the company parameters.
Based on the advice or tip from some broker, they put the hard-earned money at stake.
If the fundamentals are not clear and there is no profound knowledge of the subject, it is obvious that the trade doesn’t earn profits.
People ignore the timings
In the intraday trading, one needs to be extremely cautious about the timings.
Entry and exit points shouldn’t be missed.
While buying a stock, decide at what price you will exit the holding; low and high both.
The moment the stock reaches the desired high price, book the profit.
If the price falls gradually, then square off the position at the stop loss price.
One who doesn’t follow it lands into trouble. Self-control is essential to minimize the loss.
If everyone follows discipline, then intraday trading will reap great fortune!
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