The sad truth is that some of these stocks will never rebound, at least during our lifetimes. I’ve been subject to the vagaries of the market and Lady Luck far too often to continue trading, so I gave it up a long time back in favor of long term investing, which has been much easier on my wallet and my nerves.
The biggest reason for them to lose money is greed, to make more profit even when they have earned quite a handful amount of money. Probably the best approach to trading is an unemotional one, when you just think of it as a job.
Here’s why and how trading stocks and market timing have cost many a poor soul their nest egg.
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They typically borrow money to transact at higher trade volumes because they’re dealing with such small margins.
Making the wrong decision about what stocks to buy and sell and at what time can result in bad outcomes.
It’s all a big gamble really and the only half sure way of profiting from the stock markets is by investing long term. Day traders tend to have super high portfolio turnover rates, which leads to trading costs and short-term taxes cutting into your profits.
Sure, if you are just making your way in the share market, you are bound to come across a few situations which you cannot get out of.
Trading is one of the only occupations in the world where there are literally no barriers to entry. Make no mistake about it trading is a business and if you’ve failed to plan, you’ve planned to fail! Although some people may actually have the instinct or ability to make the right market moves; most of us probably just rely on luck to get on the winning side of a trade.
In order to be a day trader, not only do you have to have a strong stomach, but you have to outperform the market by more than the extra costs required to be a day trader. The basic premise behind why the stock market exists is because companies need money to grow. But once you become a seasoned trader, you should be able to meander your way through all the pitfalls of the market with ease.
A private company turns into a public company and that is when a company first appears in the stock market.The stock market can be compared to eBay. On account of greed and the desire to make more often leads you astray, so you end up losing it all despite being a seasoned trader and all that! Eventually a company gets so large that they stop lending money from their friends, local banks, and family.
The left over shares have value and the general public decides what that value is based on the stock market. One random example would be if a certain company goes up during a certain time of year.If we assume that Apple will make more sales during the holiday season then we may be able to assume that its stock price will go up during that time of year. Instead I turn on my computer and begin looking at a chart, do a few minute pre market analysis, and begin trading.Most people that we call day traders look at the market which strictly technical analysis. The only difference between the three is the amount of time they are involved in positions.Scalper TradersProfessional day traders that make money in the stock market with high frequency and lower profit are called scalpers.
The goal is to take advantage of small inconsistencies in the market in addition to quick movements (changes in value in a matter of seconds or minutes).A scalper may only be in a position for five or 10 seconds or possibly a minute.
Our live classes are normally a few hours as well since the best activity in the markets come within the first few hours.Swing tradersProfessional day traders that make their money swing trading involves a much longer period of time. A swing trader uses fundamental or technical analysis but stays in trades over a few days or even weeks. If we are estimating the value on something we can also estimate that the value is going down and make a profit on it.Day traders can actually make more money when the market is going down, when the economy is in a recession, or when there is a crisis.
One of the reasons I love to make a living day trading is because we actually make more money and an economic downturn and a crisis than we do when things are going well. A bit of novice background of how I make a living day trading & traveling around the world.
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