Wednesday, August 20, 2014

Why are most of Traders in Stock Market making losses?

If you are an investor for long term in stock market, then it is a matter of time, which will decide the profit of your investments. But when it comes to trading, it is the matter of cutting your losses quickly which decides the profit of your trading.

 Investing and Trading are both different ball game in Stock Markets. Stocks Markets are always bullish in the long run. So any Investor will get his chance of making profit in the Market. But for Traders, odds are always against the trader. First he has to make a right entry, and then he has to make a right exit. The odds will not be in favour him to make a right entry.

Against this odds, if he makes a right entry, then he has to make a right exit. Even after seeing a good profit in paper, if he doesn't book profit at the right time, his trade may still end up in loss. But if he uses a proper trailing stoploss, he ends up in a small profit or a big profit. But in case of loss, he needs to be careful. If he doesn't cut his loss quickly, he will end up in loss, if not he will end up losing his capital.

 So cutting losses quickly is the key to your success in trading. So enter the trade with a clear cut stop.

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