Why 95% of Traders Fail: Understanding the Common reasons and How to Avoid Them

95% of traders fail in the stock market. Even after learning the stock market properly, they face many failures. Don’t they know how to trade? Why do they fail if they know how to do that? There are many reasons for this and we will see all the reasons in this article.

Why 95% of Traders Fail : Top 10 Trading Mistakes

  1. Over Confidence
  2. Lack of market Knowledge
  3. Over-leveraging
  4. Lack of diversification
  5. Risk Management
  6. No Discipline
  7. Lack of patience
  8. Trade Fear
  9. Greed
  10. Over Thinking

The above 10 reasons are ninety-five reasons why traders fail in the stock market. If all these are correct and trading then everyone can win in stock market. Here’s how to fix it

Over Confidence

Too much confidence in yourself is the reason a trade fails. The stock market doesn’t always behave the way we think it does and it varies from time to time. Before taking a trade, many times we research and take that trade. But, the stock market is moving against the trade we took.

Even if we know that the trade is wrong, we will not get out of it and think that we will return to profit. That is the high trust placed on us. This belief is the reason we fail in that trade. So how do we fix this? If the trade goes against us after we take it, we have to accept the loss. Only by trading like this you can get profit.

Lack of Market Knowledge

Trading without understanding the stock market. In today’s modern era, many people can see profit in trading through many social websites, they share the trade to others through WhatsApp and Telegram. By doing this without any stock market knowledge we fail in the stock markets.

Before coming to stock market, what is stock market? How do they take place? We have to learn many things like symbols in it. After learning we practice it and calculate the profit and loss in it. Then invest a small amount and start trading and gain experience in it and then if we trade. We will not fail 100%

Over Leveraging

What is the state of mind of traders who are new to the stock market when making a trade? After we take a trade that goes into loss, we wait and wait and wait and hope that the trade we took will come up. We will face a big loss in this.

This is a common mindset for traders who are new to the stock market. Same mindset when we are in profit we take short profit and close that trade. How do we move forward in this? When you are at a loss, you should exit this trade as soon as possible. We have to wait while we are in profit.

Lack of Diversification

We can find two types of traders in the stock market one knows nothing. Another knows a lot. A trader who knows a lot about this, while trading, they have many different thoughts and Diversification. Does it go up, or say down, where it goes up and comes down?

It is impossible to take a correct trade by coming up with various thoughts like this where it goes down and comes up. So even if we know more, it can take a right trade-off to avoid multiple thoughts. So Practice one strategy, it is good for Share Market

Risk Management

If we trade without risk management we can only get loss at the end of the trade. First of all what is risk management? We can count two persons. A person earns ten thousand rupees per month. Another person earns Rs 1 lakh per month. Both are stock market traders. When both take the same trade, the one who earns one lakh rupees per month will keep the Stop loss of his trade at a long, while the one who earns ten thousand rupees per month will have the same amount of loss.

The biggest loser is the one who earns ten thousand rupees per month. So only if you know the loss as per your income, you can win in the trade. Not only this but before taking a trade we should know how much loss we are going to face in it. If we trade without knowing the loss, we end up with only loss.

No Discipline

Discipline is very important in stock market. If we continue to trade without discipline, we may exit the stock market. So, everyone should be disciplined first while coming to the stock market. Well, first of all what is discipline in stock market? For example a trader records a loss after taking a trade. Taking another trade right away. He also registered a loss. Taking another trade again. Without such constant discipline we were only taking trades and eventually the entire investment in our account would be empty.

Therefore, before coming to the stock market, after knowing many important information about it, after practicing, you can only succeed if you trade with discipline. Let’s take a trade that the trade is moving up and it will immediately come down, after closing that trade we will take a trade that is going down and it will immediately come up. Trading should not be done without knowledge of such stock market and without discipline.

Lack of Patience

Where we Book a loss on the trade, the stock market moves upwards. It’s not just me, this happens to all traders. The only reason for this is lack of patience in trading. Patience in trading is like a second eye.

When doing a Trade, we should engage in that Trade knowing how much our profit is, how much is our loss, where we should Book the loss, and where we should Book the profit. If we do not know any of these, we will only lose money if we trade. Where we want to Book a loss, the trade is taking place just above it, so we will Book a loss at that point, we will not be patient for a while, if we are patient like that, we do not need to Book a loss in that trade. So patience is very important in trading, many people register losses without patience

Trade Fear

Fear is a must for all traders who are just starting out. Knowledge of a trade may be good for us, but we will not take that trade because of fear. But the trade will happen as we thought. At other times by leaving the right trade, we would have made the wrong trade out of fear and suffered a loss. So, after practicing well, by investing small amount, you should overcome the fear first. After that trading properly can win the trade.


With many traders reporting their profits on social media, greed comes first to everyone that they can earn more profits if they go to the stock market. Without any knowledge about the stock market, if you are greedy for other people’s profits and trade without knowing anything, you will definitely face losses. First you need to learn, then practice and then earn small profits, if you do this properly and consistently, you too can earn more in the stock market. Without knowing all these, if you trade greedily in the stock market, you will suffer losses.

Over Thinking

People who first come to the stock market based on interest tend to think more about the stock market. Thus, when you think too much about the stock market, there are chances of losing in the stock market at some point. So after learning well always without thinking about the stock market, when trading, research it properly and trade, it is good.

All the above reasons are the reason why 95 percent of traders fail in the stock market. If you have all these, fix it little by little and do the exercises and then start trading, you can definitely make good profit. Thanks to everyone

Thanks to nseindia.com

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