How to lose less in the stock market?
Not losing means making a profit in the stock market.
People who have failed in the stock market frequently discuss how they lost money and stopped trading.
When I first started trading, I used to look at the market for profit opportunities, and I used to dream about getting quick money from the market without having to work a traditional 9-to-5 job. This is not a hoax; anyone may make quick money in the market if they have the right techniques and market understanding.
Very few are ready to learn, but everyone wants to earn. This mindset is preventing people from making money in the market. I entered and began trading in the same way. I was always looking for ways to make money as quickly as possible. But it didn’t take long for the stock market to prove me wrong. After a few months of trading in the stock market, I ended up losing money.
I learned everything there is to know about trading, including how to use tools, draw trendlines, discover breakouts, and use RSI, MACD, and other indicators. Nothing, however, helped me in recovering from my loss. Because your ego prevents you from exiting a losing trade when you get into one.
What happens next if you lose?
To overcome that loss or end the day at breakeven, you tend to overtrade; while the prospect of recovering a loss on the same day is appealing, it encourages you to increase the size of your loss. Because your perspective shifts as you start a new trade in the day. You want to make a profit, but recovery trades are usually emotional. This forces you to enter trades even if there isn’t any sign for doing so.
What I did to reduce loss?
Mindset
I changed my trading perspective; when I first started trading, I was looking for enormous returns and wasn’t aware of the risk-to-reward ratio. I discovered that it helped me focus on my target and stop losses. This strategy helped me determine whether the trade was worth the risk. This significantly assisted my acceptance of the loss and profit.
I progressively got market-ready since I knew what I needed to do in each situation. So mindset helped me enormously to reduce the loss.
Meditation
The stock market just demands one skill: patience.
"The stock market is a device for transferring money from the impatient to the patient.” — Warren Buffet
I began meditating to help me be more patient, but it not only helped me be more patient, but it also helped me enhance my personality. It resulted in a sense of focus and harmony. My perception was altered simply by sitting for 15 minutes with a pure mind and no thoughts. As a result, your patience will aid you in making sound decisions in the fast-paced stock market.
Money management
Traders usually trade with their entire capital in the hope of more profit gains. It usually increases the risk of losing entire capital in few trades. One should always trade with 20–40% of their capital. It helps traders to hedge the position if something goes wrong. Even exposing less money in the trade makes you lose less money.
Margin
Beginners tend to come into the market with less money and a desire to make more money, so they take advantage of the brokers’ leverage. Basically, if you have $1000, brokers will give you 10x-20x margins. As a result, you trade on margin and wipe out all of your money.
When I first started trading, I used margin, and I realized that it is beneficial to traders who are confident in their ability to make a profit.
Stop trading on margin unless you have complete confidence in the market; it will allow you to learn more with a smaller investment.
Traders should focus on learning first and earning will follow.
Keep trading!
Keep one mantra in mind “Calm is a superpower”
