Can You Really Make Money Trading Stocks – Anyone starting out on the road to becoming a trader eventually comes across the statistic that 90 percent of traders fail to make money trading the stock market. This figure assumes over time that 80 percent lose, 10 percent break even, and 10 percent consistently make money.
An interesting point about this statistic is that it is not dependent on geographical region, age, gender or intelligence. Everyone aspires to be in the top 10 percent who make consistent money trading in the stock market, but few are willing to put in the time and effort to achieve this.
Can You Really Make Money Trading Stocks
When I give presentations, I ask people in attendance if they want me to teach what 10 percent of traders know or the other 90 percent, and every time they say 10 a hundred For me, the answer to understanding the 10 percent is simple – you just need to look at all the books and courses out there and most of them don’t.
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To be successful in trading the stock market, you need to do what most traders do not do. This may seem like a simple scenario, after all, you don’t know what you don’t know. So how does a beginner work out what to do with the overwhelming load of information available?
In this article, I will explore why most traders consistently fail to make money trading the stock market and more importantly, what to do to avoid being part of the 90 percent . I will also give you an overview of what the 10 percent of successful traders do.
No consistently profitable full-time trader has ever told me they got there by luck. All follow these simple steps:
Step 3: Those two steps are of no use unless the trader is willing to put in the effort to achieve his trading goals.
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Another statistic is that learning to trade in the stock market takes two to five years of experience. There is no substitute for hard work and no shortcuts to becoming a professional and competent trader. In fact, self-education requires both. Commitment and work. But you don’t have to be a genius or a rocket scientist to earn consistent profitable returns when trading the stock market. In fact, I think it helps not to be a rocket scientist.
What I have found is that many newcomers to the market complicate the process, and I attribute this to two things. First, financial services industry experts investing in the stock market for small investors can seem complicated, mysterious, and only to the very wise and educated. And secondly, there are marketing companies that advertise that they have “no knowledge, no experience and no time. No problem. In fact, they fill their pockets with expensive seminars or DVD sets.”
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This brings us to the biggest reason why most traders fail to make money trading the stock market: lack of knowledge. We can also give a bad education in this area because when many people want to educate themselves, they look in all the wrong places and therefore, they get a bad education.
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In fact, many people call themselves traders because they buy and sell stocks. But when asked how they analyze the stocks they buy or sell, they claim they read reports in newspapers and on websites and occasionally look at online charts with their broker.
When questioned further, they say that although they had an idea of the basic information needed to evaluate a stock, they had little or no idea what they were looking at when it came to understanding how to interpret the charts. . And no one had a plan or understood anything about money management.
An educated trader, however, understands the importance of developing a profitable trading plan, how to analyze stocks to know why they buy and sell and how they will manage the trade. Stop loss and size positions to ensure they minimize the risk of their investment and maximize profit.
If you are serious about achieving long-term wealth when trading the stock market, I encourage you to read my top 10 stock tips that will dispel many of the myths holding you back.
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Stock market trading inherently involves some level of risk. Yet most people who are attracted to the market are ready to take a big risk, believing that they have enough tools to trade after reading a few books or attending a weekend course. Indeed, many traders are searching. For instant gratification, diving headlong into the stock market using complex strategies in the hope of profiting from their efforts. Unfortunately, many people lose their hard-earned savings on unrealistic expectations.
We are told that knowledge is everything, but in a business context I believe that applying true knowledge is everything. The streets are full of traders and many people profit mainly through luck in the bull market. than good information. A strong bull market tends to mask errors in judgment and lack of knowledge, which is why I say that unless you have been trading the stock market successfully for more than two years, you cannot consider yourself a trader .
Every week people contact me who want me to teach them how to trade, and most people want it to be quick, easy and cheap. If that sounds like you, you’re probably part of the 90 percent. Get Real Would you go to a doctor who has only watched a few videos or attended a weekend workshop? Would you have your car serviced by someone who has, or would you let your children get on the bus if the driver was only reading a book? How to drive?
It takes three to four years or more to get a university degree, so you can enter your favorite profession. Likewise, stock market trading is a business and those trying to build it should treat it like a business. Failure to provide. Demanding respect is the main reason why most traders fail to make money trading the stock market. To be an educated trader you need to combine experience with a high level of knowledge; Otherwise, your chances of long-term success are very low.
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No matter why you trade, learning to trade is the easy part; The hard part is understanding your psychology – because it’s true, the nine inches between your ears will determine your success as a trader. If lack of knowledge is the main reason most traders fail, psychology comes in a close second.
A trader’s attitude or psychology not only determines how they approach their trades, it also determines how they approach the stock market. Emotions of fear and greed drive traders and investors alike, and without proper education these emotions are often amplified, leading to costly mistakes.
To highlight this, we get a lot of calls from people with no knowledge or experience who want to learn how to trade forex. When I ask why, they often say because they don’t have much money but this is the very reason why they shouldn’t trade in this market.
People who tell me they have very little money to invest but want to trade high end markets are usually greedy. They believe that if they only have $2,000 to invest, their return on investing in a leveraged product will result in a greater return than if they invested directly in the stock market.
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This is because if the stock goes up 20 percent they will only make $400 but when they are leveraged 10 to 1, they will make $4,000. So, in their minds the desire for a quick return is worth the risk, although, having said that, they rarely, if ever, consider what they might lose.
Unfortunately, although this is a romantic idea, it is a misconception. The market doesn’t care how much you know or maybe you only have a few thousand dollars, it does just that whether you make money trading the stock market or not.
And here’s the challenge: If you don’t have a lot of money, you’re more emotionally attached to it and, as such, can’t afford to lose it. So, if the trade goes even the slightest wrong way, fear of losing. Starts hard, often leading to bad decisions and losses.
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Individuals then take a micro view of the market by looking at their trades every day or even intraday, or, worse, they base their decisions on short-term market volatility. This leads to the even greater sin of overtrading, as individuals chase the market in an attempt to recover.
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