Why day traders lose

[jcojci]

Not many daily traders use stop loss, that is right because they have a big ego that saying they don't need that. They thinks that their analysis will helps them to trade and analyze the market and profit. Day trading is not easy so they must not feels superior because they follow the market moves, analyze it, and enter the market.

A wise trader know when they should quit trading and not forcing to keep trading. If they see the sign to quit, they will not wait too long instead will takes the profit and leaves it. Many things they need to prepare before they deciding to be a day trader so they don't just chasing the profit but could be wise according to the market situation.

[Nrcewker]

A trader that does not plan for heavy price fluctuations in his analyses will always be a failed trader.

He will first be called a failed trader if he chooses to trade pairs with high volatility. If your target is to achieve low but consistent profits then you need to drop the idea of trading highly volatile pairs. Traders set stop losses in such a manner that they can secure a small profit but the same stop loss strategy isnt ideal for coins with heavy price fluctuations.

I am not saying I make good profits from day trading. In fact I have stopped completely after suffering a heavy loss. But yes, I know how the market works. People also need to avoid using high leverage when aiming for small profits. I am saying this especially to scalper that is taking on huge leverage beyond your capability is nothing but a way of destroying your capital.

[Zaharai]

Actually, I think the mentality of quickly withdrawing losses in trades pushes day traders to face even bigger losses. It is impossible to survive in the market if you cannot give up the mentality of making profits every day. The key to winning in trading is not to increase profits, but to control risk. Trying to enter the market unnecessarily every day reduces the ability to make mental decisions. If you have 2-3 specific good trades a day or a week, you will keep a cool head and the quality of your trades will be too better.

[Showlove01]

The answer to the question is very simple OP, remember it is not only day trader that do lose money even scalpers, and swing traders do lose money too but answering the question you asked, i will start by saying the first reason they lose money is because they lack discipline and they do not have rules to follow. a day trader will win lets say two trades without loss and the win will be enough to tell the market good bye but they will want to flip more by so doing you are been greed and this greed most times result to loss. Another thing is target, some traders do not have target and so they just trade anyhow until they blew their account or incur a significant loss that will make them to revenge trade. there are lots of things that makes day trader lose money but like i said not just day trader.

[Youngrebel]

I'm not generalising this but it is actually easier to be indisciplined and go out of control as a day trader because trading everyday makes you set unrealistic expectations for yourself and my reason for saying that is because day trading itself is dangerous, you cannot always make profit from the market especially if you think that you have to trade everyday.

A lot of day traders lose because they overtrade probably because they lose too much or make profit, either way this makes them chase the market continuously and any trader that does that exposes themselves to the dangers of trading.

Day Traders also lose because they don't stick to a particular trading strategy, the inconsistency is also one of the reasons why they don't get the results they expect. They take too much risks without thinking about cutting them down or reducing them, this is as a result of greed.

[pawanjain]

The thing is, when a trader starts trading and making money he gets overwhelmed with the easy money that he's initially got.
So he starts making bigger trades and end up losing money, then he gets impatient and starts throwing money on his trades.
In the process to recover, he loses more until the point of self realization hits and then he starts learning.
This is the learning process that most traders go through and it never stops. Some times we make money, some times we learn something.

[Big Dirams]

The thing is, when a trader starts trading and making money he gets overwhelmed with the easy money that he's initially got.
So he starts making bigger trades and end up losing money, then he gets impatient and starts throwing money on his trades.
In the process to recover, he loses more until the point of self realization hits and then he starts learning.
This is the learning process that most traders go through and it never stops. Some times we make money, some times we learn something.

Correct learning never stops in trading and the more we pursue learning and increasing our knowledge about the market then the more we start making responsible decisions and make profits too. New traders always face this over confidence when trading is making high profits for them, but as a new traders they shouldn’t let themselves fall into this ocean of overconfidence instead they could help themselves out by not risking to much and if possible I’ll advice them not to increase their lot size and focus on the minimal one and make much profits first before thinking of taking high risks carelessly.

[puloweh555]

The thing is, when a trader starts trading and making money he gets overwhelmed with the easy money that he's initially got.
So he starts making bigger trades and end up losing money, then he gets impatient and starts throwing money on his trades.
In the process to recover, he loses more until the point of self realization hits and then he starts learning.
This is the learning process that most traders go through and it never stops. Some times we make money, some times we learn something.

Yes, that's true. A lot of traders, especially those who are mostly day traders, lose money because they think trading is a quick way to make money and that they can somehow beat the market. The truth is, the market is very random, emotions are hard to control, and especially when we're making money it makes us greedy, while if we lose, we still want to chase our losses, even though the short-term edge is very slim.

Besides that, what causes most day traders to lose is that they don't realize trading isn't just about analysis, but also about discipline, risk management, and they have to accept that making consistent profits in the long run is almost impossible for most people.

[Makus]

The thing is, when a trader starts trading and making money he gets overwhelmed with the easy money that he's initially got.
So he starts making bigger trades and end up losing money, then he gets impatient and starts throwing money on his trades.
In the process to recover, he loses more until the point of self realization hits and then he starts learning.
This is the learning process that most traders go through and it never stops. Some times we make money, some times we learn something.

This is why it is important to be disciplined as a trade, being overwhelmed by the profits made and acting based on that emotions would definitely lead to losses in the long run. The need to place bigger trades after making significant amounts of money as profit is just a sign of greed.

The biggest mistake any trader can make is to chase losses after making mistakes that led to it in the first place, there is no amount of trying hard to recover that would be able to fix the mistake that's already made, acting based on emotions is only goingt to put you in a .are precarious situation.

[atookz]

A trader that does not plan for heavy price fluctuations in his analyses will always be a failed trader. Stop lose can be used, but good trading is beyond stop lose. The most important thing is that if bitcoin fall 20% in just 15 minutes which is huge, how much are you willing to be losing at that price point which will determine the amount of money that you will be using for the trading. Most traders do not think like this.

This is the essence of position sizing, but a lot of people don't get it. The logic should be: if bitcoin fall 20% in just 15 minutes, I'm only willing to lose 1-2% of my capital — not I have X capital, so I'll take Y position size.

That would be the wrong way around in general when the market is wild. Doing it the other way around — sizing first, risk second — is usually what gets people wrecked when the market gets wild.

[Barikui1]

. New traders always face this over confidence when trading is making high profits for them, but as a new traders they shouldn’t let themselves fall into this ocean of overconfidence instead they could help themselves out by not risking to much and if possible I’ll advice them not to increase their lot size and focus on the minimal one and make much profits first before thinking of taking high risks carelessly.

I don't think that overconfident is the problem of new traders, because how can an ignorant person be over confident in what he knows little or nothing about?

Overconfident is the sickness of veteran traders, not newbies that are struggling to navigate their way in the market. The main problem of newbies is ignorance, because since they are new, they may not know their left or right that much, and as a beginner, controlling their emotions will be their biggest problem, so I disagree with your sentiment on this matter that the problem of newbies is over confidence.

[Mpamaegbu]

Day traders have their target to profit daily

Having a daily profit target will put you under pressure, forcing you to take trades when there are no proper setups.

@michellee, there's nothing wrong in not setting a daily target as a day trader. As a day trader what matters most is to have a winning mentality but limiting one's wins for the day because one has reached one's supposed target isn't a good trading plan. There are days the market will be gracious to grant one easy wins, especially when one is riding on the back of a trend and getting in early. On such days, it's better to milk the market all one can. If it's a bad day with losses, don't FOMO to recover. To FOMO is deadly. It's almost like revenge trading.

@Rruchi, yes it does put one under pressure. That's why I don't have a strict rule on what my daily take in should be. I just try as much as I can to be satisfied with whatever comes in. The ultimate goal is to record daily wins, even if it's as paltry as a dollar daily. A win is a win. No pressure.

[Leahized]

Spot on. Greed and unrealistic expectation are some of the biggest reasons people lose money in trading and even investing. Knowledge, experience, and skill can certainly be a factor too, but they come second. Because we can always improve our knowledge and skills and gain more experience over time. But controlling greed is not something you automatically learn just by gaining more experience.

The main purpose of trade is to earn money. But if there is more confidence and expectations, then many times may be harmless. But there should be different concepts in investment, because the trade and investment is different. But to achieve skills and knowledge in any work, it is important and immense. Which helps a person to reach the topmost position.

I do not think, the word greed will be reasonable for Trade. In this case, the profit should be brought, because it takes unreal risk for excessive profit. Which a trader's liquid zero becomes zero to the funds.

[Zigabel]

Traders can not make money daily, but they need to also learn how to lessen their risks.

Scalpers and day traders are only looking for huge profit. They will make money but still continue to trade. Some will lead to overtrading after many daily profit but later overtrading make them to lose. Some traders will make money and become too confidence and increasing leverage which later lead to loss of money.

A trader that does not plan for heavy price fluctuations in his analyses will always be a failed trader. Stop lose can be used, but good trading is beyond stop lose. The most important thing is that if bitcoin fall 20% in just 15 minutes which is huge, how much are you willing to be losing at that price point which will determine the amount of money that you will be using for the trading. Most traders do not think like this.

Traders can actually make money daily if they are not adding greed to their strategy but then it is important that you know that in reality expecting a profit daily is almost not realizable without some level of greed because there are days you will not have market moving in your favour, and making some profit on such days will almost not be possible, but you may want to force in some profit and may likely loose even more, in as much as you may want to see it that there is every possibility of making profits daily, it is also advisable not to fall for that line of taught to want to trade everyday because it is never a sustainable strategy, it will work only for a while, after which it will fail and you may loos even more if you happen to be an emotional person.

You may not be really wrong saying good trade goes beyond stop loss, but then stop loss is a very essential aspect of a good trade, it is never a completely good trade with effective risk management void of psychological pressure without a stop loss. Stop loss helps to predetermine your expected loss and give you the psychological edge to trade better.

[Texac]

. New traders always face this over confidence when trading is making high profits for them, but as a new traders they shouldn’t let themselves fall into this ocean of overconfidence instead they could help themselves out by not risking to much and if possible I’ll advice them not to increase their lot size and focus on the minimal one and make much profits first before thinking of taking high risks carelessly.

I don't think that overconfident is the problem of new traders, because how can an ignorant person be over confident in what he knows little or nothing about?

Overconfident is the sickness of veteran traders, not newbies that are struggling to navigate their way in the market. The main problem of newbies is ignorance, because since they are new, they may not know their left or right that much, and as a beginner, controlling their emotions will be their biggest problem, so I disagree with your sentiment on this matter that the problem of newbies is over confidence.

New trader can lose money because they lack knowledge, have unrealistic expectations, and can also become overconfident.  Some get lucky with a few winning trades,  start thinking they're actually good at it, then increase their position size or use higher leverage and end up losing money.  That's overconfidence.

On the other hand, experienced trader already know how brutal the market can be, so they're often more cautious rather than overconfident.

Emotional  control and discipline are a problem for every trader,  because not every experienced trader can stay profitable.

[Webutxo]

Actually, I think the mentality of quickly withdrawing losses in trades pushes day traders to face even bigger losses. It is impossible to survive in the market if you cannot give up the mentality of making profits every day. The key to winning in trading is not to increase profits, but to control risk. Trying to enter the market unnecessarily every day reduces the ability to make mental decisions. If you have 2-3 specific good trades a day or a week, you will keep a cool head and the quality of your trades will be too better.

Some traders are so used to the free profits they make and some of them comes to the market at the right time. There are some people that see only bull run, they never have any experience trading coins during the bear market, when that period emerges they becomes confuse because that's the period it becomes almost impossible for them to make money from trading but the real traders still find a way to make money from trading even if it's bad.

Any trader that is not prepared to make loss in trading will find it hard to make money in trading because there are days you are going to make loss even you are too good for trading, the earlier you prepare your self for trading, the better you become and when you see unexpected result, you will not have to worry yourself much about the result.

[LogitechMouse]

The thing is, when a trader starts trading and making money he gets overwhelmed with the easy money that he's initially got.
So he starts making bigger trades and end up losing money, then he gets impatient and starts throwing money on his trades.
In the process to recover, he loses more until the point of self realization hits and then he starts learning.
This is the learning process that most traders go through and it never stops. Some times we make money, some times we learn something.

How sure you are that it's easy money for the trader? Who knows? He might've held that trade for days, and being patient is hard especially when it comes to trading don't forget about that.

Based on what you're sharing, TBH that's me back then when I was starting to learn trading. Losing consecutive times, making bigger trades to recover those losses, being impatient that it came to a point where I feel that I want to recover it as quickly as possible, and in the end, I lost so much money and got liquidated at one point as well. During that time, I was looking at something and I haven't blinked for around 5-10 minutes I think.

At that time, I'm disappointed on myself because of what I did, but after 5-10 minutes, I took a bath, taught of my mistake, learned from it, and move on as well. Moving on is very hard to do especially if its hard-earned money, but if you want to be successful, you should learn how to do it. I stopped trading for weeks after getting liquidated BTW.
For me, there are way, way to many reasons why day traders lose, but let's not think that all of them are losing. There are still many out there that are making buckos off of day trading. Those are the ones who took years before they find a strategy that works for them and made consecutive profits on a monthly basis.

[Powerjumboo]

Gaining daily profits is impossible except during bullish markets, but even then, traders are willing to hold on to their positions for a while during price corrections, as these are only temporary.
However, greed and panic often take over, leading to losses.

To earn money from trading, it is necessary to know some strategies of the trading platform because trading is very risky and trading is not an easy way to earn money. However, if there is volatility in the market, a day trader can profit from that volatility with his trading strategy and experience. I will not say that a trader can profit from trading only in bullish conditions, but if you know the experience, you can definitely profit from a little volatility in the market.

[Oshosondy]

To earn money from trading, it is necessary to know some strategies of the trading platform because trading is very risky and trading is not an easy way to earn money. However, if there is volatility in the market, a day trader can profit from that volatility with his trading strategy and experience. I will not say that a trader can profit from trading only in bullish conditions, but if you know the experience, you can definitely profit from a little volatility in the market.

But it will be good to treat trading like gambling at first. This is what many traders will not understand. A good trader should be very patient to the point that the money that he will use to trade must be little in a way that it will not affect him. Trading is not very easy like many people are posting about. They will say trading is very profitable for them but in reality they are just losing.