Top 5 Reasons You Aren’t Making Money in the Stock Market

So you’re struggling to make money in the stock market. Well, don’t worry you’re not alone. Everybody struggles in the beginning and lucky for you we are now going to cover the top 5 reasons, you’re getting crushed in the market and help you fix it!

Emotions – I would argue this one is the biggest. When you start trading nobody wants to lose money and the very thought of it can make you sick to your stomach. Your emotions will keep you from making rational decisions. Let’s think of an example. Let’s say you’ve done your research and you find the perfect stock. Or perhaps you really like one of our stock picks on Option Zoo. The next trading day you start to watch the stock and sure enough, it starts to run. Well this is typically where your emotions start to kick in, maybe you hesitate. As the stock runs, you start to feel like maybe you’ve missed out on the best part. And the stock continues to run higher and higher. You can’t take your eyes away and find yourself dreaming of all that profit you’ve missed out on. Finally you convince yourself that you’ve missed out on too much already and now you must buy in to this stock. You summon the courage, press the buy button, and voila! You’ve bought your shares. Suddenly the stock stalls out and goes flat or even worse it drops like a rock, and you’re instantly down hundreds or even thousands of dollars just like that. Now you have to make the decision to continue holding or sell and take the loss. As a swing trader, more than likely you’re going to hold on, but it’s extremely frustrating when you’re entry point is so ill-timed. The point is your emotions got in the way and kept you from making a rational decision, a better decision. This happens to us all from time to time. One of the best ways to handle this is to accept that at times you will lose money. If you’re feeling uncomfortable about a trade, take a smaller position, you can add to it later if the trade is going well. Or, if the stock falls, it might be a great opportunity to simply add to the position and bring your cost down.

Lack of Strategy – The next reason you should know is lack of strategy! Not having a sound strategy decreases your chances of success. The stock market is kind of like a giant casino. When you have a strategy, you’re increasing your odds of winning. There is no guarantee you’ll pick a winning trade of course, but every bit of knowledge you can pick up and apply to your trading strategy will help increase your odds. Study technical analysis and indicators to help you with your entry and exit points. Also, learn how candlesticks can help indicate the direction of a stock. You can learn all sort of these strategies for free on Youtube. When it comes to picking stock, if you have absolutely no idea what to look at, join our website for free and get access to some of our top stock picks that will give you some great ideas.

Fear Of Missing Out(FOMO) – This one very much ties in with our first example in that it’s easy to watch a stock and feel like you’re missing out on a big move. That sense of loss is when the FOMO is your worst enemy. Forcing trades that aren’t there or have already played out make it easy to make really bad decisions. But don’t give in to this fear. Often times when it feels too late, it is! The best way to deal with FOMO is to remind yourself that the market has opportunities literally every single day. Move on, study your stock picks and come up with a good entry and exit plan, then stick to it. If you missed out on a trade just walk away and find something else. At any given time you can find a stock or stocks making a big move so don’t get caught up in the false thinking that this is the last chance you’ll have to make a big trade.

Lack of Patience – “Let The Setup Come To You” is my first thought when thinking about patience. Being patient is often the most difficult part of trading because just sitting there watching the market is extremely boring. But boring is good when it come to making money. If you’re not bored then chances are you’re trading too much. Stop it! You must be very strategic about what and when you buy. Don’t force what isn’t there. You can’t “think” a trade into existence. The market is very unforgiving and will punish your impatience swiftly! Again decide on your strategy and carefully plan your entry and exit. If you see nothing you like then remember there is nothing lost by waiting.

Over Trading – This one is a true killer of accounts and a little difficult to pin point. You do your research and come up with a whole bunch of great stock picks for the week. You convince yourself these are all winners. Shoot, you’ve even gone back and tracked your accuracy and know that at any given time, your accuracy has been 70%. So hey why not buy into every single stock pick you just came up with?! The winners will easily make up for the losers. Yeah…except they don’t. This is the part that is difficult to explain, I’m no statistician, but we’ll try! There comes a point in your account when too many trades start to become too hard to manage. Maybe all of them are winners, but many of them don’t win at the same time. One day a few of them may be up and several of them are down. You think “great the winners will keep running” and you do nothing and wait for the losers to catch up. Well the next day your winners go down and the losers go up. Your account starts to go on a roller coaster ride! You start to lose track of what is what and when to sell and when to ride it out and adskfja(*)@*$$#^! Yikes! I don’t know the magic number, but from our own personal experience here at Option Zoo, after opening 4 or 5 trades, it starts to get pretty hard to manage. So be mindful of what you have open and again stick to your plan. Over trading is easy even for experienced traders. Sometimes the opportunities are too hard to pass up. But they can bite you and hard!

I hope this helps and if you haven’t joined our site yet, what are you waiting for??? It’s free and you get access to our top stock picks that we’re watching at any given time. Join here

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