It has been widely stated that about 90% of stock traders are losing money. What have contributed to such an unfortunate and pathetic situation.
Stock trading can be “Low Risk / High Reward” instead of “High Risk / Low Reward or No Reward”, only if you are a trained and competent trader. The outcome could be worst than gambling in a casino, if you are an untrained stock trader.
Most stock traders started their stock trading journey as untrained traders, and have a false sense of confidence that stock trading is simply a matter of “Buy Low / Sell High”. They thought that they know but in reality they don’t.
For instance, a shirt at 70% price discount and a stock at 70% price discount are not the same. They have different value propositions.
A shirt at 70% price discount.
It is still the same shirt and has the same value.
A stock at 70% price discount.
It is still the same stock but has a different value.
As untrained stock traders, they lack the ability to evaluate and verify stock information received. They would regard all “stock tips”, “insider information”, stock recommendations and other optimistic stock news as reliable, and would faithfully follow them by engaging in frequent and risky “blind trading”.
When the complexity of stock market situation set in, these incompetent stock traders would be confused, affected by and even overtaken by their psychological emotions like fear and anxiety. Most would eventually ended up losing their money.
Their naivety, ignorant, lack of essential knowledge and skills are the root cause of widespread losses. A stock trader truly needs to be trained before embarking on their stock trading journey, otherwise it is better and safer to place your money in a bank deposit account.
