Do you know why the retail traders are losing money even though they have the perfect trading environment to execute quality trade? The novice traders blame the market but the intelligent investors try to find the faults in their system. It’s your fault for which you are not able to make money at trading. You must believe the fact, at least 2-3% of the stock traders are making an insane profit in Hong Kong. They are also human being but they have special skills. They know the key factors which cause them to lose money at stock trading. They avoid the most common errors in trading and manage to make a decent profit without having much trouble. Let’s discuss the top five reasons why people are losing money in the stock market.
1. Trading the penny stock
You should try to trade the penny stock at the beginning of your career. Trading penny stock is more like playing with fire. The price movement is very unstable and you don’t know the future of the company. On the other hand, if you trade a stable stock like Apple, Google, etc., you know these companies are not going bankrupt. You know they are the smart leaders in the business industry and they will find a way to boost up the company’s reputation and revenue. So, choosing such a stock gives you a better edge to win the trade.
2. Believing in false information
You have got access to the internet but this doesn’t mean you will believe all the information that you read on the website. You need to check the authenticity of the news data. People often misinterpret the news data and take the trade based on the news. As a result, they lose a significant portion of the capital. You should have the skills to source the correct information’s from the market. Without knowing the relevancy of the news and relating to the technical levels, you should not be taking any trade.
3. Choosing the wrong broker
Choosing the wrong broker is one of the major cause to lose money at stock trading. You must choose the professional broker who is willing to extend their help in times of need. Visit the website of Saxo and you will notice that they have done all the possible things that can help the retail traders. Open a trading account with such a broker so that you can enjoy the technical advancement at trading. Sticking to the low-end broker puts you in a very odd situation. You will often face technical glitches and it will be hard to withdraw a big profit. So, chose a broker like Saxo who has a proven track record in the financial industry.
4. Greed and fear
Failing to control your greed and fear is another common reason for losing money in trading. After winning a series of trades, the amateurs become greedy and they want to improve the performance by increasing the risk exposure. But increasing risk exposure without having any logical reason is nothing but the reflection of your greed. This will lead to a significant downfall in the trading business. On the other hand, the inexperienced traders fear to take the trade when the setup is perfect. They are always in fear to lose money. You have to accept the fact that losing trades are very common and there is nothing you can do to avoid all the losses in trading.
5. Not knowing your roles
As a stock trader, you play the role of an investor. Investors are always very calculative and they never take trade with aggressive methods. They focus on the core element of trading and they try to improve their skills by analyzing past trades. You must know your roles to become good at trading. If you can do this properly, you can expect to become a top trader in Hong Kong.