It was a night in the year 2020, and a young man sat in his room, looking for work. Just then, he started googling and found some telegram links, where he occurred to come across the post. He decides to open a Demat account the next day, borrow some money from his parents, and begin trading. In the year 2021, he has not paid back the money he borrowed from his parents. This is only one example, and there are far too many more unknown stories.
Do you want to know what to do if you’re losing money in the stock market on a daily basis? Then read this post and you’ll find out…!!
Recognize where you are falling behind.
If you keep losing money on a regular basis, you’re doing something you’re not supposed to be doing…!! That’s all there is to it. All you have to do now is recognise your flaw and work around it.
Many people are losing money these days, and they are losing money for a variety of reasons. Here are a few of them to help you figure out where you’re falling short:
- Inadequate Position Sizing
If you have a pocket-size of 20,000 rupees and are taking positions with leverage up to a hundred thousand rupees, you are almost certain to lose every day. Why? Because a prominent position in a deal will make you nervous. And if you are anything other than calm when trading, you will undoubtedly lose money.
Keep your position size in check to avoid this. Of course, having a margin isn’t necessarily a negative thing. We at TCI utilise it to mint a lot of money. On the other hand, it’s a two-edged sword. Always begin with a tiny quantity and gradually increase it.
- Inadequate Stop Loss
Another reason you can be losing money while trading is because you set or don’t set stop-loss orders. Newbies frequently trade without a stop-loss order, which is a sure-fire method to rack up negative red days. You must realise that you must have a good stop-loss and target in place; else, you would be like a dog chasing its tail.
Another type of trader loses money in the market because he or she understands stop-loss but does not respond wisely enough. If you, too, are using a 5 point stop-loss against a target of 50-60 points, you’re setting yourself up to lose money. To restrict your losses and widen your horizon to earnings, you must set a correct stop-loss.
2) Don’t be fascinated by possibilities.
This is something that many new traders, particularly those who began trading in 2020, do since options interest them. If you are new to trading, this instrument should not be tempting. Why? Because, as nice and easy as it may appear to people who make thousands of dollars dealing naked options, it isn’t…!!
If you’re losing too much money in the futures market, it’s probably time to pull the plug for a while. Take your time to understand the complexities of options and how to manage them. You can also seek the assistance of a mentor. Remember that we at TCI are always happy to assist you with any trading questions you may have.
3) Move Away From Indicators and Towards Price Action
No one can stop you from losing money in the stock market if your charting screen looks like this.
If you’re day trading every day, you’ll have to understand that indicators don’t work very well in the market. Years ago, indicators were created to help people comprehend specific aspects of the market without being fully reliant on them. The market has grown considerably more dynamic and turbulent in recent years, and the only things that work are DATA and price action.
A typical price action trader’s chart does not resemble the one seen above. Is it something along these lines? ????????
You should also understand Price Action, which is considered the holy grail of trading. Don’t worry if you’re not sure where to start;
4) Trade, Trade, Trade, Trade, Trade, Trade, Trade, Trade, Trade
You are greatly mistaken if you believe that day trading can be done as a side business to your regular work. If you manage your office responsibilities while trading on a daily basis, you’re putting yourself in a position to lose more money than you earn.
You must realise that day trading does not allow you to multitask. While punching in any order or in a transaction, you must have a clear, calm, and composed mind. While trading, do not attempt to manage your video calls, conference calls, or even entertain any meetings. If you can’t carve out specific time in your schedule, swing/positional trading is a better option than losing money on a daily basis in intraday trading.
5) Enhance Your Way of Life
Many inexperienced traders get up about 9:10 a.m. They open the mobile application and start putting in orders like crazy, even if they aren’t doing the healthy regimen. They make money on occasion, but they lose money the majority of the time…!! If you can connect to this, you’re not alone.
Trading is a serious career that needs a high level of commitment. In life, a good trader is always a nice human being. So, when you’re preparing to start a trade, you should also improve your lifestyle — wake up on time, meditate, eat healthy, and keep your mind clear of extraneous distractions.
So those were some of the key takeaways from our trading knowledge and experience. Before you start trading again, give them another thorough reading. Meanwhile, take a break and practise all of the above in real time. Remember, just because you’re losing money doesn’t mean you should quit up trading. Allow yourself to lose since you will be trading….!! Also, before you give up trading,