WHY TRADERS LOSSE MONEY

When a new player enters in market in his first few trades he makes good profit and after that he starts losing loosing and losing and finally quits from market. Today here we will tell you why it is so?

• When a new player enters in market he has less knowledge so he follows views given by his friends and broker.
• He initially use small amount of money loosing which will not affect his life style and he also satisfied with whatever he gets thus avoiding greed factor. Greed and fear factor is the biggest reason for people to lose money.
• After few successful trades he introduces more money to market even beyond his capacity and when stop loss for trades done using this money triggers than he starts fearing. We suggest all trades to use only limited money within his capacity and use only such amount of money loosing which will not affect his life style u can’t avoid risk factor associated with market.
• People followed tips given by their broker and we all know brokers only works for their brokerage so when u ask idea about market they gave their own idea about market so that you may trade and they get their brokerage.
• When people start trading before opening market they develop their own strategies about trades for the day but when market opens they forget their strategies and start trading randomly. Doing this is very dangerous in market.
• When stop loss are getting hit, traders stop using stop loss and now they have unlimited risk and limited gain.
• To avoid such kind of scenarios use your own analysis, use stop loss order and trade with define risk. When this situation comes traders end up with loss and finally quits from market
  

your suggestion and comments are always welcome. add your comments and suggestion and if we find it valid than we will add in our post too.

HOW TO DECIDE TRADING QUANTITY.

This is the most frequently asked question by all day traders as you cannot move original Stop-loss level to any other levels. Than its become very difficult to decide in how much quantity you should trade. Normally 2-3% risk of your trading capital treat as good trading risk.

Lets take a case that your trading capital is Rs. 50000. as per 2% calculation you should take only Rs. 1000 risk per trade. Now question comes that how much quantity should I trade so that if stop-loss triggers than I must loose only 1000 Rs per trade. Infect Your trading quantity depends on your risk ability. Means your risk ability will decide in how much quantity you should trade. For Example you got tips to buy SBI at 2000 with stop loss of 1950. And your risk ability is Rs. 1000 per call. Than how much quantity u should buy of SBI??? Confused????

Quantity=Risk Ability/(buy price- stoploss price)
=1000/(2000-1950)
=20
That means should purchase 20 shares of SBI so that if sl trigger than you will loose only Rs 1000 as you had decided earlier.

Let’s take another example of unitech. For example you got a call to buy unitech at 70 Rs with stop loss of 68.50 and your risk ability is Rs 1000, than how much quantity you should buy unitech. Just calculate like this-

=1000(70-68.50)
=666.66
~666
Means you should buy only 666 shares of unitech. In any case if stoploss trigger in unitech than you will loose only 1000 Rs