Why 80% Of Day Traders Lose Money

Forex Day Trading Reddit, Why 80% Of Day Traders Lose Money – Day Trading Forum.

A recent study found that 80% of day traders lose money – which is unacceptable. Here’s why, and how you can prevent this from happening – enjoy! Add me on Instagram: GPStephan

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According to the stock trading platform, eToro, a staggering 80% of day traders lose money over the course of a year, with the median “loss” being 36.3%.
https://faculty.haas.berkeley.edu/odean/papers/Day%20Traders/Day%20Trading%20and%20Learning%20110217.pdf

Now for those who aren’t aware, day trading is a style of investing in which you buy and sell a stock, or any other investment, within a short period of time – meaning, you’ll usually hold the stock for a day or two, or sometimes even just for a few hours, before you sell it.

First, a HUGE reason for such large losses is due to a lack of diversification.
Consider this…a finance professor from Arizona State University analyzed the performance of over 26,000 publicly traded stocks since 1926. The most COMMON return for an individual stock, over it’s lifetime…was a loss of 100%. And only 48% of stocks delivered ANY positive returns, whatsoever.

Given that, over the long term of day trading…your likelihood of losing money is INCREDIBLY high without a SIGNIFICANT amount of diversification…and money….and lucky timing…to pick those “winners”
https://www.kiplinger.com/article/investing/T052-C007-S001-why-most-stocks-are-stinkers-and-what-to-do-about.html

Secondly, given that information…it was found that many investors are OVERCONFIDENT about their investment decisions, leading them to trade more aggressively…and lose more money.

A study published in 2017 found that when day traders are successful, many of them disproportionally attribute their success to ability…rather than luck. Which ultimately leads them to making riskier investments, and further contributing to these losing statistics.

Third, your own EMOTION while day trading will likely be the hardest barrier to overcome…
And when investing, we have FOUR main emotions that come to mind:
Hope – Greed – Fear – And Regret
Needless to say, oftentimes those 4 emotions will overpower ANY logic when it comes to the exhilarating thrills of making money and investing…

Fourth, unless your trading with a LOT of money – you’ll likely WANT to make riskier, profit driven investments to justify the time you spend investing.
This might cause people with less money to make RISKIER investments in the pursuit of making 1000% profits…not 30% profits…therefore, increasing their likelihood that they’ll lose money.

And fifth, the main reason I believe people lose money by day trading is because they believe it’s a quick, easy way to make money from their computer or phone with very little work.

These are people who don’t have a plan, they have no idea when they want to enter or exit a stock, hey don’t do their own research, they want to “get rich quick,” and they’ll often jump into trades on a whim because someone recommended it on reddit’s WallStreetBets.

For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com

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Foreign Exchange Trading Techniques

These techniques might also offer you well as a part-time foreign exchange investor:

Take fewer settings and hold for days.

It is critical that you recognize the chauffeurs of your currency sets and have actually put in the time to actually recognize your market. Therefore, after studying the market and limiting particular preferred currency sets, selecting a couple of settings and holding them for a longer time period is a sensible approach for part-timers. One more wise approach is to place in stop-loss orders with all your trades to decrease any kind of losses if the market moves against you.

Check out long-term fads.

There is worth in looking at longer-term fads (daily/weekly) as opposed to looking at per hour or perhaps four-hour charts. This will allow you to trade while looking at your computer system just once a day.

Establish trading orders.

Establishing restriction, stop-loss or various other entry/exit orders can ensure you do not miss opportunities to get in or leave settings. The majority of trading systems permit these orders with no additional charges.

Usage modern technology!

Establish automatic alerts to your smart phone or e-mail to maintain you notified of currency cost motions while you are not proactively trading.