How To Avoid Losses while Trading?

Hey there, let me tell you something about the markets. Everybody who is attracted to markets always comes with a desire to make money. During my 4 years in a trading experience, I have never met with a person who came to the market in order to lose money whether it is short or long term. It is extremely difficult to avoid losses while trading. But that doesn’t mean you cant be successful.

You have to understand making money by trading is an extremely difficult task.

Making money by trading seems easy because of TV channel experts who keep on shouting to buy or sell various stocks. But in reality, once you have entered a trade, only your risk-taking capacity will tell you how much money you will make in the end.

Now coming to your question, that if you are continuously losing money in the market, then please stop trading for a while.

As nobody is born with an ample amount of money. Everybody is trading with their hard-earned money as there is no scope of black money in capital markets.

Now, how should you Avoid Losses while Trading?

1. If you are completely new, then don’t pay to an advisor to get a stock recommendation because that cannot guarantee returns.
2. Start with basics, learn about trading like when to trade, how to trade, risk management, etc.
3. If the above point looks difficult to achieve then learn from some market expert. Someone who is having a good amount of knowledge. This doesn’t mean that you pay 50–80K just for a 1-day seminar.
4. Once you are familiar with markets then add 2,000–5,000 funds in your trading account. Under any circumstances don’t keep funds more than 10,000.
5. Now start testing the strategies which you learned before by buying/selling 2–4 stocks only. Remember to avoid using any form of leverage (buying/selling on margin, futures & options).
6. Keep repeating the above point for at least 4–6 months. The Key to becoming profitable is to learn from your mistakes.
7. Once you start making a profit consistently than only increase your capital to 50,000 -1 Lacs otherwise keep practicing trading with 2–5K.
8. Success never comes cheap, you have to sweat for it. Not everybody has the patience to test and improve their strategy for a long time.

The truth about the markets is that the one who is looking for quick money never recovers his money back. Therefore it is very important that you should focus on learning before diving further in markets.