Why Lose Money ?
Why Retail Investors Lose Money in commodity market ?
- He is among the last few people to enter into the Bull Run
- He keeps on changing a single commodity
- Never put the stop loss in the system
- Always, the first one to exit from the commodity which are in the bull run, with minimum profit
- Don’t have a habit of trading with robotics mechanism
- By doing Emotional Trading, Holding the positions in Loss and cutting down the positions early in profit
- Lack of homework before entering in a commodity market
- Lack of resources about the movements and news which affects the commodity market
- Too much greed from a single commodity
- Day Dreaming in commodity market also makes him suffer huge losses
- Never traded with the trend of the markets
- Fear in going shorts in commodity
- Was not able to stay away from the market when is is sideways
- Didn’t invested money in sectors which are outperforming the index
- Listening to rumors and investing money there.
Do’s & Dont’s
- It seemingly looks to be the simplest and the most rewarding. But in intraday trading one has to be very fast and quick and have to be on your toes always, so there are certain rules which one has to keep in mind
- If index is in positive from yesterday and the commodity you are holding is in minus then it should be cut and if intraday trend of index is in buy then one should buy a commodity which is in plus.
- If index is in minus then one should look to short commodity which are minus and not commodities which are in plus.
- It is not necessary that a commodity which is weak today during intraday trading might be weak tomorrow also, simultaneously if a stock is strong today might not be strong tomorrow.
- If International markets have gone up overnight, the markets here in all profitability will open strong, so one should be quite careful when buying commodities as the general psychology of public is to buy when good news is there.
- Being a contrarians is very important while trading intraday.
- Stop Loss is a must while trading intraday.
- Always trade in very liquid commodities i.e. which have high volume because as entry and exit can be very fast in such commodities.
- Do paper trading before you actually start trading so that when start making paper profits, then shift to actual trading.
- Keep your volume constant e.g. if you trade in five lots of Crude Oil futures then trade in five lots only. This Position can be increased only when you are satisfied with your trading for a month. It should not be that one day you buy five lots and next day trade in ten lots and third day you get a loss and stop trading for two days.
- Fear and Greed are at maximum levels while trading intraday so always have less position when you are new to intraday trading as otherwise you will be mostly under tension.
– Gold Crude Research Team
Never risk more than 10% of your trading capital in a single trade. Always use stoploss orders.
(Here you should know your loss you can give in a situation where the trade starts going against you.)
- Never do overtrading.
- Never let a profit run into a loss.
- Don’t enter a trade, if you are unsure of the trend.
- When in doubt, get out, and don’t get in when in doubt.
- Only trade active markets.
- Distribute your risks equally among different markets.
- Never limit of you orders. Trade at the markets.
- Extra monies from successful trades should be placed in a separate account.
- Never get out of the market because you have lost patience, or get in because you are anxiously waiting.
- Avoid taking small profits and large losses.
- Never average a loss.
- Never cancel a stoploss after you have placed it.
- Avoid getting in and out of the market too soon.
- Be willingly to make money from both sides of the market.
- Never buy or sell just because the price is low or high.
- Never hedge a losing position.
- Never change your position without a good reason.
- Avoid trading after long periods of success or failure.
- Don’t try to guess tops or bottoms.
- Don’t follow a blind man’s advice.
- Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
- When you lose, don’t blame it on luck.