Nobody said that trading was easy. Some day traders lose money so quickly they don’t even realize the losses until it is all gone. So just why do day trader fail? In this article, I’ll let you know the 9 reasons why day traders fail and lose money before they begin to trade. Believe me, you’ll want to read it – even if you already day traded.
Before going shopping at the supermarket, some people have a ritual. I treat my money well, you know. I’m very fond of it. So before leaving home to spend it, I make a list of the things I need and prepare a budget (everything in cash) of how much extra I’m allowed to use. I never leave the house hungry. I always bring a notebook to compare prices between brands. If I don’t do this BEFORE shopping, I feel like I’ve lost money.
It’s similar to day trading. There are many reasons day traders fail before trading.
1. Day traders fail because they don’t study
My main advice for anyone who wants to start in this path is: STUDY! And studying is not only picking up a finance textbook and reading everything. It’s reading internet articles, it’s watching YouTube channels that feature traders. You can study by learning how to read charts and by learning the terminology. Reading books is totally allowed, but don’t go straight to complex finance textbooks, they are hard to follow. I recommend that you read works that show trader’s experiences, books that explain concepts and technical analysis clearly, from the very beginning.
2. Day traders fail because they don’t follow a strategy
Remember my supermarket ritual? This is pretty much a strategy, so I don’t lose money – or at least more money than I should. Plans are essential for trading, as they are for dieting. Successful traders create their own written trading plan, firstly based on other people’s experiences and on the knowledge acquired.
Your strategy may not work correctly the first time – you can still lose some money. However, you HAVE to come up with one anyway. The creation of a plan will show you how you can improve your next transactions. Everything you think and write down before trading can be considered as a strategy, but I have some suggestions here!
3. Day traders fail as they fear failure
Common sense has put trading in the same position as gambling. This isn’t true. That’s why many people fear failure.
Trading is something you study, learn, develop and grow with. It’s hard work, true, but when you get the gist, you feel that you’re ready.
Don’t worry, failure will only come if you don’t learn, measure, plan and implement enough risk management. Failure is not trading’s fault – it’s the trader’s.
But don’t worry, dear. If you want it, you can have it. This is not something for few. Maybe you think like this because you’re a woman, have you considered? What makes men fearless that can’t make us?
Think from another perspective and understand how you can fight the fear of failure. This way, you won’t lose money before doing the damn thing.
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4. Day traders fail as they don’t know why they should trade
Finding a reason why you want to day trade is important. Have you imagined marrying someone without knowing why you chose to do it with that specific person? This is losing a marriage even before marrying. Trading is a commitment, and you must understand your motivations. When you’re not profiting, you’ll need motivations.
5. Day traders fail because they don’t have the discipline
Day trading is like dieting when it comes to making a plan, we discussed that. But also, just like in a diet, traders need to stick to a winning strategy for as long as it lasts. Before trading, you should be aware that the plan you’ve prepared NEEDS to be followed step-by-step. If you don’t think you’ll have the discipline, your trading debut will be a failure. You’ll end up losing a few pounds to learn the hard way.
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6. Day traders fail as they don’t have a role model
Whether it’s on Instagram, Twitter, or in reality, we always need someone to look up to. Traders who don’t have a role model that tells them about their trading experiences and real-life trading will lose money. If you just study numbers, charts and the market in general, you’ll won’t succeed. That happens because, to be good at this, we need to see other people’s failures and successes, we need constant motivation and someone to talk to.
7. Day traders fail as they don’t gather the resources
Resources are vital for traders. They will help you before trading when you’re learning and planning, and in the process of trading when you’re tracking and measuring your profits.
Books and courses are crucial before you trade. You’ll lose money surely if you don’t read at least a few stories of someone who have lost big time. And if you’re a person who learns better when someone’s teaching you, a course is an excellent choice.
8. Day traders fail because they don’t know where to trade
Some people are unaware of where to day trade – also related to seeking knowledge – and use this as an excuse not to do it. I have an article listing some of the best platforms where you can trade stocks, forex or crypto online. Piece of cake.
9. Day traders fail if they don’t trade
The final reason might not make sense. You are thinking “how am I losing money if I’m not trading?”. Well, my love, if you’re not day trading, then where is your money going? Is it the same money you use to buy endless amounts of clothes? To go out with your friends and pay for their drinks? Or is it resting in peace below your mattress?
Reasons why day traders fail and lose money before they even trade!
If, after you saved money for your savings account, you’re still accumulating – or just spending – without doing anything profitable with your money, then you’re losing. Trading is lending cash and receiving it back with interests. It is taking advantage of the market’s fluctuations. If all your wealth is below your mattress, I’m sorry to tell you this, but it’s going to die.
Do you remember another reason why day traders fail and might lose money before trading? Have you lost money like this? Don’t let your money die!
Comment on the box below and let us girls know!