Day trading is just like a double-edged sword. A trader can make great benefit from it and also can lose a substantial amounts of money as well.  According to various research, there are around 90% of the traders lose their money in the stock market with day trading.  Most day traders end up losing their hard earned money in the stock market due to the insufficiency of taking the right decisions. Ultimately they fail to make the right decision and do not understand the market fluctuations and end up being victims of day trading. 

There are several reasons because of that most of the people lose money in day trading but here we will discuss some of the most important reasons. Without any delay let’s get started

1. Lack of Discipline

The primary reason for the loss that people face in day trading is the lack of discipline. There is a strong requirement for a trader to stick on  a plan with dedication. A proper intraday plan involves various factors to consider, profit targets, ways to put a stop loss, and various ways to choose the right trading hours. For a trader, it is very important to be disciplined because this proper discipline will help a trader to reduce the losses and maintain their capital.

2. Excessive Dependency on Tips

Nowadays everyone on social media proves themselves as a pro trader and you can see a lot of tips related to intraday trading are flowing on social media. It is easy for a trader to get involved with these tips which should be avoided at first place. The best way to learn day trading is by slowly learning to understand the structures, read charts, and predict the future outcomes on your own. Many traders stop themselves from making these efforts and due to this, they end up losing their money. They not only lose their money but also their confidence as well. 

3. No Setting of Trading Limits

In day trading, the success lies in taking risk. As a trader, you can set a stop loss take profit limit when you enter in intraday trading. By pre defining stop loss a trader can save himself from potential losses in intraday trading. This approach is itself an essential part of trading discipline where most of the people fail. For example, most of the traders become subject to a loss in the first hour of trading, in such case the trader needs to shut down the trading for the remaining hours of the day. One more thing to keep in mind, before starting trading you should have an overall fund loss limit in your trading account which will save you against trading losses.

4. Try to Balance Rapid Losses

Compansating rapid loss is the most common mistake that a trader makes in the trading community. Whenever a trader becomes the subject of a loss, he/she tries to cover the loss by trading excessively. This type of action does not only lead to loss bt it could put the trader in some great trouble. In day trading, losses are a common phenomenon. So , instead of overtrading it is sensible to accept the loss, analyse the strategy oonce again and make some changes in it form the next time.

5. Unawareness of Current Affairs

There are various factors that affect the market such as political events, economic conditions, international affairs, natural disasters and many more. News, events and other reports related to these events also impact the market. So, it is essential to keep a track of national and international markets. It is wise to trade once the news is announced. And do not try to guess the  market based on the news.

There have been various incidents when the traders do not have any strong strategy, instead of that they make conclusions based on their feelings and emotions. Day trading is a skill which takes time to develop with time, it is not a gamble, so do not expat rapid results. 

Bottom Line

Above were some of the most common reasons that is why most of the people lose money in day trading. So, always ensure that you are disciplined enough and always stick to a proper strategy. And analyse your strategy at regular intervals so that the things will fall in place.