to Lose Money Trading
by Frank Soler of SolerInvestments.com
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
- Over complicating trading. Really, simple works.
- Ignoring money management (trade size, stop/losses,
- #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
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
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
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, SolerInvestments.com, provides real-time
Futures, and Stock Picks, and a free
online trading education center.
Copyright @ 2009 Soler Investments All Rights
Reserved. Reprint of this article is allowed as long as
due credit is given to the author and links are left intact.