Why am I losing on the stock market?

This is the question most traders ask after they once again entered into an unsuccessful transaction that led to losses.

There can be many reasons for losing, some of which are completely independent of the qualifications and personal characteristics of the trader.

Today we will try to talk about what leads to unprofitable trades and how to get out of such situations.

But before starting the discussion of the topic, I would like to say that trading and not losing on the stock exchange is simply not realistic, unless you have a good source of insider information.

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The main thing is not to trade without losses, but to close a losing trade in time and not drain all the capital at your disposal.

Now let’s move on to answering the question “Why do I lose on the stock market?”

Market laws do not work, and the market is controlled by market makers

Not long ago I watched an excellent film based on real events, “Dumb Money,” which perfectly characterizes the current situation on the stock market:

Due to the fact that today huge funds are concentrated in the hands of a small number of people, it is possible to control the market.

That is, a person or group of people can easily influence the price of a selected asset, inflate it excessively or bring it down to a minimum.

Because of this, long-term investors suffer because they expect to buy inexpensive shares of a promising company, and after a few years make a profit due to rising prices.

But market makers play short, creating a large number of orders to sell, this often leads not only to a drop in price, but also to the bankruptcy of the company.

In this situation, there is only one way out - to abandon long-term transactions and copy the actions of market makers or look for assets that are not subject to such influence.  

Lack of a complete picture of the market

Price movement does not always lend itself to logic due to the fact that we do not see the full reason for what is happening.

For example, news comes out about the growth in global demand for gold, but its value on the stock exchange begins to fall, and this is because someone is currently shorting something in large volumes, and the news about large purchases is already outdated.

Most investors open trades based on only one signal without using additional filters.

Emotional Decision Making

You checked the quotes and saw that the Bitcoin rate had shot up, went to the forum, and there everyone was shouting that you need to buy.

why do I lose on the stock market

Naturally, you enter into a buy deal without even checking what caused such growth and without looking at what the technical analysis indicators show.

But it turns out that you opened a deal right at the resistance line and the trend has already begun to weaken, as a result you will again ask yourself the question - Why am I losing on the stock exchange.

Here are a few more reasons why you lose on the stock market

Insufficient understanding of the market. Many people start trading on the stock exchange without having a sufficient understanding of how the market works and what the risks are. They don't know how to analyze companies, how to assess risks and how to manage their capital.

Impatience. Most beginners want to get rich quickly on the stock exchange. They are not willing to wait patiently for their investments to increase in value.

Rumors and market pumping. There are a lot of rumors and attempts to influence the trend in the world of finance. Unsubstantiated claims that Bitcoin will be worth a million dollars in a year should not be taken seriously, even if this information appears on a reputable news site.

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