In this article we will understand why traders are not able to make profit from trading and investing? If this is sorted, automatically traders and investors will get on the path of profitability. After all, every trader that is participating in the market wants to trade for profit. However, markets are brutal and they favor those who have skills, discipline and tools to maneuver the ups and downs of market movement.
Below are “5 Whys?”, due to which traders and investors are not able to becoming profitable!
Table of Contents
1. Why they loose money in the market?
Traders and Investors loose money in the market because they don’t have a trading plan. A trading plan enables a trader to control losses be keeping them ready! To have a plan, traders and investors first need to understand their own personality and emotional quotient (EQ). They need to become self aware! Accordingly to their personality they need to pick up their trading style. Once traders and investors have clarity on their style, they will have clarity on what kind of planning they need to do to trade or invest in stock market.
2. Why they don’t have a trading plan?
To make a trading plan trader need to understand stock market and it’s behavior. According to their style (Intraday / Weekly / Swing / Positional / Long Term Investing) they need to know why market is behaving the way it is behaving. Also they need to know what is the current behavior of the market. Is market bullish? Is market bearish? Is market sideways with highly volatility? Is market sideways with medium to low volatility? Are these market behaviors in short term, weekly or monthly? Once trader understand market behavior in sync to their style then they will win half battle, to strategize and plan trades accordingly. Rest half battle is about execution discipline.
3. Why they can’t understand market behavior?
Traders and investors can’t understand market behavior mainly due to one of the two reasons, either they don’t know how to analyse the market or they are not sure about their own analysis of the market. There is a third category who are trading analysts. To solve for this and assist traders and investors in their journey we have built Sentiments Decoder. It saves traders and investors time and gives ready to use technical analysis in simple form. Traders and Investors really don’t have to swamp themselves into any complexity of data and analysis. Professional traders don’t! They always have trading analysts and tools to back them up! All they need is ready to use simple technical analysis in the form of sentiment view decoding market behavior.
4. Why they don’t use simple technical analysis?
All traders who are not doing trading professionally, jumps into the market without knowledge and skills. Hence, lack of knowledge leads to lack of understanding on how any tool can help them. Some of the traders who realize this need, may not know what kind of tool is right for them? Based on their ability and skills they should choose right tools. For example, most of the tools are data heavy, but most of the traders are data illiterate. They don’t know how to read, understand and interpret data. There are literally handful tools like Sentiments Decoder, in the market that gives ready to use simple analysis to a trader to take independent decisions.
5. Why they don’t use right tool?
Serious traders and investors use tools. However, they need a tool that can simplify their life and not make more difficult. This will enable them to make right trading and investment decisions at the right time. Using right tools they will be able to understand markets and its behavior quickly enough to build a view and take right decisions. However what really happens, most of the tools in the market gives data and graphs in a visually appealing format. These tools leave the interpretation upto the traders and investors. That makes traders and investors confused! Hence traders and investors loose opportunities and hence trust on the tools, as they never get any edge that they are looking for to become a profitable trader.
Conclusion
Traders and investors should keep learning continuously, above 5 whys! won’t come on day one. Traders and investors should keep experimenting to discover themselves and their style of trading and investing. Accordingly they should pick up their tools to get right insights at the right time to make timely decisions.