How to Lose Money Trading
by Frank Soler of

So, you discovered that you can make money trading stocks, options, currencies, or futures? From nearly two decades of doing just that, I'm here to tell you, YES, it's very possible to make a lot of money trading.

AND, it's even easier to lose a lot of money trading. Learning what can help you to lose your hard earned money is just as important as learning how to make money trading. Better yet, learn both...

Ways to Lose Money Trading

  • Trading before you're ready (not taking the time to learn).
  • Trading based on news and emotions (or hope).
  • Trading with money you can't afford to lose.
  • Trading with insufficient capital (too small of an account size)
  • Trading based on "can't lose" tips, message boards and forum board "hot stocks", TV show "best buys", friends advice, gurus, junk email picks; Basically trading based on any info from someone else that doesn't have any real basis.
  • Using any "Green light = BUY, Red Light = SELL" simple, can't lose box trading system. These auto-mated "can't lose", made for TV, systems do not work. Nuff said.
  • Thinking that some magic technical indicator is the way to trade. Technical indicators provide information, but are not crystal balls.
  • Picking and choosing any strategy that you come across. Then using the next one you come across. Then...
  • Trading a system that is not right for your personality.
  • Over complicating trading. Really, simple works.
  • Ignoring money management (trade size, stop/losses, targets, etc.).
  • #1 reason how to lose money trading: Trading without a well thought out, thoroughly researched, thoroughly tested, rule based, trading plan. Without a plan, plan to fail.

Knowing how to lose money trading is very important. If you find yourself doing any of the above things, you should know that you are indeed on the INCORRECT path to trading success.

While avoiding the above ways to lose money trading is critical, simply avoiding those will NOT make you money trading. So what will? If you're curious, here's an article on "How to Make Money Trading." It contains in simplified form what works in all markets, be it the stock market, the forex market, options, and even futures.

Frank Soler is a successful trader and Registered Investment Advisor. His company,, provides real-time Forex, Futures, and Stock Picks, and a free online trading education center.

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