Why Day Trading Without Knowledge is a Suicidal Attempt?
- IFMC Institute
- Mar 18, 2021
- 3 min read
Sometimes when you hear about day trading you might get intimidated with risk and returns while discussing the companies whose shares you might find profitable for investment. You may think there is no way a layman can master day trading.
You may find day trading like another mystery of the universe to the beginners. At the same time, you hear that investing in the stock market without knowledge is equivalent to gambling. The trick is that without knowledge of any subject it is impossible to achieve anything from out of it.
Day trading is a form of trading style, where a trader (referred to as a day trader) buys & sells shares within the same trading day or even multiple times during the same course of the day. Not all traders are suited best to become day traders. Day trading requires complete knowledge of technical and fundamental analysis. Moreover, it requires discipline on emotions as trading in the live market is changing as the price fluctuates every second.
Three reasons why day trading for beginners is challenging:
Price fluctuations: Winning and losses come at a faster pace during day trading. The price of the fluctuations of the share from one to another in a very short period. The volatility rate is higher which means the risk is even higher during day trading in comparison to any other form of trading style.
2. Fear and Greed: The individual desire to make profits substantially influences their decision to make efforts. A bit of success can indulge any trader into acts of greedy actions that take them out of the strategy planned. Similarly, fear can cause a trader to hold back on too much when there is time to make an opportunity.
3. Require practice: Many novice traders fail to understand that day trading requires time to learn. Lack of time and commitment to research will not result in becoming a successful day trader. You’ll require to practice day trading just like having another job. Once you put your ego aside, you can start learning as much as possible.
With these reasons in mind, you must make a well-informed decision before investing. The combination of trading knowledge and skills will make you a good day trader.
3 Reasons Why Day Trading Without No Knowledge is a Suicidal Attempt
We often see that beginners risk their money in day trading without any knowledge. Here are a few reasons you need to consider to prevent mistakes:
Restraining from learning
One of the biggest myths is that traders think that they will gain back the money invested in the market at some point in their life. There are failed traders around the world who never gained their money back. Always invest in your knowledge first. Knowledge is the best thing which can pay high interest.
2. Patience for Success
Patience is the key to victory for any successful trader. Not every trader can not make a winning trader without controlling on greed emotions. When losses are involved it is ideal to wait for a good trading sport. It is difficult to learn to be patient which is probably the other reason why not everyone is born with a trading skill. The fact is that however, the lack of patience can result in poor performance and satisfaction.
3. False Expectations
False expectations are common among day trading for beginners. Trading can be manipulating. The market actions may not match your expectations. Trading must always be done in a present state of mind which will help you trade profitably.
Conclusion
All these reasons must not deter day trading for beginners in the share market. Only traders with the right knowledge, patience, enthusiasm, and passion can become successful. Understanding the importance of learning the stock market can help traders to establish ground rules. Trading is hard work and traders who have discipline and patience to follow these rules can increase the chances.
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