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How To Lose Money In Stock Options Trading In 3 Ways
By Finley Zhang
The whole purpose of stock options trading is to make money. No one decides one morning to start trading in hopes of losing their money. Every trader does it for one reason and that is to see their bank account grow. Whether it is to save for retirement or being able to take regular family vacations, trading is done for one purpose and one purpose only, to make you money. The one question most people wonder is how can you consistently make money from stock options trading, and is it possible. The answer is yes, but it isn’t the easy answer most people are probably hoping for.
Stock investing is not rocket science but the numbers show that less than 5% of traders are actually making money. Why is that? Go to your local library and you will find dozens of books on investing and the right ways to make money doing it, yet so many people are still failing. Is it because trading has changed so much over the years or is there other factors involved?
The majority of investors fail to make money during a bull market. Why? There are 3 major ways where investors go wrong in bull markets.
1.By trying to get rich quick. Everyone wishes the stock market will make them rich quick. There are a very small percentage of people this happens to and it’s usually by pure luck. Trying to get rich is risky and requires you taking on too much either by investing too much money or taking on too much leverage.
2.Watching the stock prices too close. Those who make the most money in bull markets are the investors who don’t pay much attention to the fluctuations of daily, weekly, and monthly stock prices. With daily trading increasing in popularity, the following of price changes from minute to minute increases your probability of making a decision based purely
on emotions which results in a loss.
3.Following trends. Rather than following trends of buying stock after the price has already risen and then selling after the price has already fallen you should be doing the opposite. In the bull market you buy the dips. For some buying the dips is hard to do because you are going against the trends and some just don’t feel comfortable doing it. However, if you want to make money in the bull market you have to resist the urge to follow the trends.
When you take the time to research stocks before you buy and understand their patterns you will know when the best time to buy is. Take note of the stocks high, if over a 5 year period the highest it has gone is $6.00 chances are it will not go higher than that the next time the stock rises and if it has never dropped below $2.00 chances are you will not drop lower just for you. So by studying a stock’s past history you would know when the best time to buy is and when the best time to sell is. And remember, greed will most often cause you to lose money, not make it. Greed has no place in the stock market. By: Finley Zhang Article Directory: http://www.articledashboard.com Finley Zhang is a stock investing expert and owner of Tips For Investment. Tips For Investment has helped stock investor to achieve long term and stable income by using Finley's investing tips, methods, and strategies. You can instantly download the formula by visiting www.TipsForInvestment.com
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