VideoPsychology6 min read
Why most people lose money in the stock market
Most losses come from one pattern: buying late after a rise and selling late after a fall. Here is why the crowd does it, and how a plan breaks the cycle.
Trading psychology
Overtradingzaroorat se zyada trades lena
Taking far more trades than your plan calls for, out of boredom, excitement or the urge to recover, which multiplies costs and mistakes.
Overtrading is placing many more trades than your strategy actually signals. It often looks like activity for its own sake: a trade because the screen is open, a trade to make up for the last loss, a trade because a group posted a chart. Each trade carries brokerage, STT, exchange charges and slippage, so twenty intraday round trips a day can cost over ₹2,000 before any profit. More important, unplanned trades have no edge, so they tend to lose. Suppose your plan allows two Nifty setups a day and you take nine; the seven extra trades are the ones that usually drain the account. The cure is mechanical: a written maximum number of trades and a daily loss limit, after which the platform is closed. A trading journal exposes overtrading quickly, since the unplanned entries stand out.
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Lessons that use this term
Video
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Half knowledge is dangerous: why 'kaam chalau' trading fails
A 'kaam chalau' trader knows just enough to place a trade and not enough to survive one. Five rules from the video, and an honest answer to how long learning takes.
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Intelligent person vs intelligent investor: they are not the same thing
Being brilliant in your own field does not protect you in the market. A 300-year-old story about a scientist, and what separates an investor mindset from a smart person's instincts.