Here are some of the common reasons why most day traders fail. Determine whether you’re an investor or a gambler. A day traders fail because they gamble and they do not understand the markets they trade.
I know you are familiar with these line; “if you want to become successful investor, you must know first what you are doing”. A day trader can possibly become rich if he is an expert in the market he trade.
The number one reasons why most day traders fail is “greed”. If you want to become a successful trader, you should not be greedy. Set your target profit each day and once you earned that profit, stop and wait for another day.
Reasons Why Most Day Traders Fail
There’s nothing wrong if you will make more profit than what you expected. However, sometimes expecting more can lead you to become greedy. Aside from greed as one of the common reasons why most day traders fail are;
- Day traders don’t understand the markets they trade.
- Day traders don’t know how to control their emotions.
- Day traders are speculating. They put money and hoping that the money will somehow earned profit.
- Other traders are just guessing. They don’t know how to read charts and technical analysis.
For me, “greed” is the number one reasons why most day traders fail. So, if you are a day trader and want to succeed in your trading journey, you must know how to control your emotions and know when to stop trading – that is when you are making enough profit for your small effort.