Are you Losing Money as Trader ?

Over the years, I have seen several people (including myself) lose fortunes while trading  and I’ve found that invariably, it would be for the same reasons. Such reasons appear mostly psychological and occur often in the trading scene.
It is a known fact 80% of traders lose money and 20% makes profits on the expense of 80% traders going well verse with
Pareto principle
So what exactly is the reasons behind that the misery of traders losing money.

Trade without plan: Most of traders enter the market based on there intuition. They just want to trade as soon as market opens without having any knowledge of volumes, support and Resistances. They just trade coz they want to trade.

Over Leverage: Traders often try to carry too big a position with too little capital, and trade too frequently for the size of the account.

Over Trade: if suppose a trader make 10K in a day he will not stop and electrified with the winning streak bet more and end up losing all the money earned.

No Stop Loss: No trading plan means no specific risk is defined and hence Stop Loss is a BIG NO.I AM ALWAYS RIGHT ATTITUDE.

Directional Bias: Traders make up their mind that I want to be either long/short and fail to take position on what market is signaling and hence make losses.

No Discipline: Not following a disciplined trading program leads to accepting large losses and small profits. Many traders do not define offensive and defensive plans when an initial position is taken.

No Holding power: Traders take large positions at one shot and are unable to bear the shakedown which market gives in extreme cases and are forced to square off the positions.

GREED: It allows traders to lose profitable positions to move into loss while they hope for large and unrealistic targets.

No Patience: Losing Traders do not have patience for price level to come and take positions; they just want to enter as soon as they start trading.

No Money Management: Due to no trading plan, Traders have no money management plan and are wiped out of market.

No Shorting: It has been observed that most of losing traders fail to take shorts when market is falling, they thinking shorting as a taboo and always go along with long trades only.

Traders believe what please them to believe and are blindfolded by their own vision they fail to recognize warning what market is throwing at them
Bucking the trend: Market is falling let’s take a contra trader kind of attitude wipe out a trader from market.

Traders plan to buy at lows and sell at highs and get stuck with a losing position 90% of the time.

Beginner’s Luck: A novice trader will always make money in first few trades and get overconfident and does mistake which make him surrender all profits and in many cases start making losses on all trades.

Averaging a Losing trade is biggest blunder a trader can do.

Most of traders are under capitalized and trade position to large as compared to there actual trading capital.

Unable to accept small losses and turn those losses in big one which wipe out there entire trading capital.

Trading on Tips and market rumor.

Trading with emotion and heart instead of mind.

Get out of a profitable position at an early stage and holding a losing position till it gets squared off.


Failing to digest the fact that market is supreme and we are just a drop in a large swarm of people.

Getting whipsawed by volatility.

I hope reader will try to overcome the common losing mistake by going through this article and make there way with 20% of profit making traders.

I would request readers to add few points which i might have missed or happened with them in there trading career.

13 thoughts on “Are you Losing Money as Trader ?”

  1. Completely agree. I feel every trader should learn basic technical analysis. Also, doing trading with small risk for small profit is advisable. It’s better to earn small profit than incurring a loss at the end of the day. Opportunities will come again but if the trading capital is lost then it is difficult to recover easily.

  2. Thanks for a good analysis.Mushrooming business of so many advisers for intraday calls&unsolicited sms or phonecalls are also responsible for losing money by gullible traders.Large brokerage firms also give calls with stoplosses for stop running by market makers.Even analysis published in ET Wealth has proved wrong in the sense that I have observed stocks recommended for sell or weak going up for e.g. BHELand UBL.Only respite seems to be few blogs by real traders likeyou whose money remains at stake to disseminate knowledge,wisdom and skills in the field.

  3. Yep…..Every trader has to go thru all these phases in his trading career..It took me full 2 years to understand, what stood between me and the trading wealth was, me only. Now i am doing intra day trade in stocks and nifty and am able to romp home with a smile on my face at the end of day. Nothing has . changed in the market for me… only I am able to control my nerves. Daily I have a list of 5 stocks which I would trade on intraday basis. No looking beyond that and once my daily/weekly target is achieved I wud leave the terminal for the day. Shorting the stocks on raily has further improved my ROI….Now i donot have any opinion of the market.Daily I wud just go with the flow…I am in the market to make money and not to score some brownie points….I am quite happy with my performance

  4. Whiplash is an unavoidable nuisance….cant get a plan to work around it… only positional….very difficult to make money intraday.

  5. Every broker offer Call & Trade Service. You can call them to trade. You can square off all the position in just one call.

  6. Yeah. I started trading futures in Feb this year. Was lucky that Silver was going down. Shorted it and made some 60K on 1.8 L capital. Made some more in Gold, then thought, I know it all and started playing Crude because it is more volatile. Bas crude ne tel nikaal diya. Sala abhi tak loss recover nahi hua 🙂

  7. one more to add.. To carry on Plus position .. and see the profits getting wiped out by external factors such as Net connectivity-2 connections both failed ..Today.. ..So have all the backups-power-technology…

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