Ever wondered why only a bunch of day traders make profits and not everyone? Read why this happens!
After getting answers to this, there come three building blocks that aim to make you a better trader:
According to an estimate, over 90 per cent of the day traders lose money in the stock market! Do you know why? Why do only one per cent manage to make profits while the rest face losses? It’s because, in order to make quick money, they often tend to fall prey to predatory smart money!
However, the question here is – ‘Why’ do most traders fail? This question is of utmost importance here as that’s what decides why most traders fail or succeed in something! Is it due to risking more than one can afford to lose, wrong tactics, or wrong strategic choices? In fact, it can be due to any of these reasons!
First, you need to answer this important question: Why do you want to start trading?
If you don’t have a strong reason, you’re most likely to be challenged and may eventually, give up your goal; so, it’s better to have an answer to this question!
The answer to this part –‘why’ can be anything like - I want to start trading to earn extra income or to be financially independent.
After getting answers to this, there come three building blocks that aim to make you a better trader:
- Commitment to learning
- Skills and execution
- Develop a trading strategy or a system
Your first bedrock is your commitment to learning. You must have a strong commitment to learn this skill because it’s going to take some time.
Structured education can help your learning process, or established traders can help you shorten your learning process.
Next, you need to build your skills and execution process. Here, skills include reading charts, placing and modifying orders, how to use software, trade management skills along with other components of everyday traders.
Lastly, you need to build a trading system, implement strategies, and sharpen your tactics over time through practice & backtesting.
So, why do you want to be a trader? We hope that after reading this article, you must have got an answer to the most important part –‘why’!