An astounding number of stock traders eventually fail.
Now, this isn’t meant to discourage you. It simply means that the ground realities are much different than what many “experts” propagate. Stock trading isn’t easy. It’s isn’t a “part-time” or passive thing where you automate the process and holiday on the beaches of Rio.
The un-success rate is staggering. And if you want to have a different fate, it’s essential that you pick notes from the stories of unsuccessful traders and apply in your own plans, strategies, and style.
Here are 5 lessons you can learn from stock traders who failed:
1. It’s not easy
Like mentioned already, making money from trades is not easy. There’s a lot to it than just buying low and selling high.
Sadly, many new stock traders enter the game with the wrong idea and mindset that it’s all easy.
Of course, they find the truth pretty quickly. And from thereon, it’s usually a downhill slope for them!
2. Having patience is key
Many stock market trading training courses are sold with promises that they will help you create a fortune “quickly”. They are misleading.
In stock trading, in order to make a high-value portfolio, you need enough patience. There’s no such thing as “quick”; there’s no such thing as a magical trade that will make you a fortune.
Beginners lack the necessary patience, which usually leads them to make uncalled and hasty trades. And this ends them up with big losses.
3. There’s a difference between being impulsive and quick
Profitable trading demands you to act quickly and tap on emerging opportunities on time.
However, there’s a big difference between acting quickly and acting impulsively. The former includes proper planning on the back of thorough market analysis and strategy-making. The latter is just taking hasty decisions without proper planning.
When you act impulsively, you will inevitably lose money. And that’s what so many beginners do.
4. A long-term plan is essential
Even when you’re day trading, making successive trades quickly, you’re going to need a long-term plan and goal.
Your smaller everyday trade must map up to that plan and goal.
But what many traders do is they work without any sense of direction. They take each trade individually and function with short-term money-centric attitude.
This approach is quite chaotic, disorganized and often leads to miscalculated decisions and hefty loss.
5. It demands discipline and consistency
You cannot spare it part-time and expect full-time income. Stock trading requires massive commitment in time and energy. It requires discipline and consistency.
You must take out enough time out of your every day to analyze the market, understand the trends and make thoughtful trades. And you must do that every single day.
In reality though, many people, assuming it to be part-time, treat trading as something passive that they spent time on whenever they feel like. It’s the worst strategy that has fail written all over it.
These are five key lessons you should take from the stories of stock traders who failed.
If you want a different fate, you must avoid doing what they do and adopt those aspects/traits that successful traders display.
Learn from their mistakes, learn from the positives of those successful, learn from a good stocks trading course, and learn from your own wins and losses. The more you learn, the more you will grow. And the more you will grow as a stock trader, the bigger and sustainable you will find your portfolio to be.