When you ask around among the circle of your friends how successful is their stocks trading, it can be pretty depressing. Only probably about 5% of my friends are making any money. With so many trading stocks, why is this?
1. Mentality is wrong. One would probably think that this is the area where they can get Rich Quick by trading stocks and how easy and profitable it is to trade with so many brokers giving abundant informative recommendation of stocks. Well, it is easy to actually trade, but difficult to trade well. Many people will just start trading without knowing what they are doing. A good course of study on the company and how they fare with their competitors with each other, what is the earning, is this company fundamentally strong, TA & blah blah blah is a must before you start any live trading. You must be educated in stocks to trade profitably. You can't just go on gut feeling. Stocks trading should be done for the long haul.
2. Trading for the wrong reasons. Once, i ask my friend, for what is the reason you trade stocks since you are not in the positive all this while. He told me, at least there is a thrill in my daily live and most importantly "is for the fun of it". Yes, there is a high associated with making a huge profit from one trade, then you are all in positive. However, do not treat stocks trading like a day at the race track. You should not trade for the excitement of trading. Not to mention that there is a lot of time to be spent just waiting for the correct trade to come along. Also, don't start stocks trading because you think it only requires a few minutes a day to make money. Even if you are scalping the market (making small quick trades), it takes time for those trades to develop and mature. One should sharpen their saw before start trading and with only one reason, that is "Winning".
Happy trading.
