6 MAIN Reasons Why You LOST MONEY in the Stock Market

Part 8 of Our FREE ‘How to Trade Stocks‘-Guide

1. Emotions took control

Only the traders who can ignore their emotions and stick to their plan can survive the stock market! Handling this emotional rollercoaster will be the biggest hurdle you will have to overcome in trading. The only way you can overcome it is to stick to our trading psychology tips and trade as much as you can risking real money.

2. No strategy, no plan

Many people want to invest in the stock market with no real plan. They neither understand the fundamentals of a company, nor do they learn technical analysis strategies to do swing or day trading. They buy and hold stocks and even buy more when they lose money.

Get started with our free and simple guide so that you have a plan when trading and don’t lose money, like 95% of stock market participants.

3. Overtrading / Revenge trading

It most likely happened to you as well. You had a successful trade and felt invincible. Every trade starts to look good, and greed overshadows your mind. That’s where you start to overtrade. Every trade can cost you money, and depending on your broker, it can easily bring you into the red.

The same goes for revenge trading. When you lost money on a stock, you feel betrayed by that stock and want your money back. All this will cause is a death spiral that could potentially wipe out your entire account in one day.

4. Wrong broker

Many traders try out one broker, lose money then, and they give up. They have not realized though, that they may have picked the one that does not fit them well. There are many reasons why a broker could be bad:

  • Bad commission structure
  • Slow execution of orders which lets you buy or sell at bad prices
  • Lack of shares to short (fewer opportunities)
  • Bad tooling or tooling that does not fit the traders trading style (charts, level 2, indicators, etc.)
  • Lack of features
  • Expensive level 2 information
  • Buying power issues

Successful traders try out different stock brokers until they find the one that fits them best. Check out our list of the best stock brokers to find alternatives that help you succeed.

5. Listening to other people

Never base your trades on someone else’s opinion! We cannot stress this enough! Whether it is a friend of yours or a so-called ‘trading expert’ on the internet, chances are high, that their opinion is wrong and your entry, in the end, is bad. At this point, your trading becomes a complete gamble. Look at opinions as if they were just ideas and do your technical analysis on an unbiased and un-emotional basis.

6. Watching the wrong stocks

Never fall in love with a particular stock, rather try to find opportunities. If you buy into a stock that does not move, you will miss the stocks that do. Especially for day-trading, your goal is to have the best stocks displayed so that you can take advantage as soon as they appear.

To find opportunities, check out our recommendation of a stock screener tool that most professional traders use.

Learn How to find opportunities
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Having a bad broker can influence your trading success heavily. Successful traders try various brokers until they find the one that fits them best!
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