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9 Reasons Why Many Stock Traders Will Lose Money In 2020

There are some fundamental reasons why stock traders lose money.

But that isn’t to say steering away from these “reasons” or slip-ups is anyway easier.

Although simpler, nothing in stock trading is easier. To build the desired portfolio, it all requires hard work, sophisticated skills, consistency, and a lot of patience.

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To bolster your return and transcend self into a smart stock trader, you must identify the weight pulling you down and take absolute steps to make the needed improvements.

In that context, here are 9 reasons why you, as well as other stock traders, will lose money in 2020:

1. Blindly following the market predictions

If you don’t already know, here’s a revelation: You cannot predict the stock market. The latest events that have hit the stock market – who could have actually predicted them?!

So, if you’re following those start-of-a-year cliché stock market predictions, and then outlining your strategies accordingly, you’re making a big mistake.

You sure can draw some basic ideas from them but to gullibly follow them will eventually lead you to losses.

Recommended Read: 2020 Stock Market Predictions – Please Stop Trusting Them

2. Not re-defining strategies and short-term goals

The stock market is dynamic. The trends change quickly and there’s always something new happening.

Not redefining your strategies and short-term goals per these progressive market changes is a big mistake.

You must be flexible to adapt to newer trends.

This requires you to audit your existing strategies and short-term goals regularly so as to adjust them to the latest market needs and requirements.

3. Not auditing the previous year

Yes, it’s tiring. And it’s a lot of work.

But then a big part of the learning process is to visit back your previous performances and draw lessons from them.

If you haven’t already audited your 2019 to figure out what went your way and what went wrong, you must do it immediately.

If you haven’t already audited your 2019 to figure out what went your way and what went wrong, you must do it immediately.

4. Being passive in learning and growing

You won’t learn triple Bollinger bands strategy by just sitting idle.

You won’t learn about the advanced concepts of technical analysis by casually trading.

To improve your knowledge and skills, you must put in the effort. You must work for it proactively.

Take out enough time every day to consume resourceful content. Read news, read books, watch videos, talk to other stock traders, and enroll yourself in good stock market trading courses.

Give the following articles a read:

9 Proven Ways to Learn How to Trade in Stocks Online

How to Learn Stock Market When You Have 9-5 Job and No Time?

5. Running after the mechanical approach

There’s a reason why traders who deploy intuition and emotional intelligence win more and bigger vs. those who follow mechanical systems.

Indeed, there are many testing tools, charts and actionable research out there that add definiteness to your strategy, making decision-making much simpler.

However, overly relying on such tools, which follows pre-defined (and, at times, out-dated) rules and thresholds is a bad idea.

It’s essential to not blindly follow them but instead to do your own thorough analysis before making any decision.

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6. Focusing on select stocks or companies

With the fate of the stock market uncertain per several market pundits, portfolio diversification couldn’t be more important at present.

So, it’s very critical that you diversify your portfolio across different companies and industries.

It’s risk management 101, assuring to limit your possible losses during the economic meltdown.

7. Premature stop orders

You can’t build a high-value portfolio if you don’t have the appetite for risk. You must be ready to take calculated chances.

When it comes to placing stop orders or take-profit/stop-loss positions, you must be willing to take risks so as to maximize your returns. This isn’t greed but a smart way of portfolio optimization.

When placing premature stop orders, you’re basically leaving a lot of money on the table.

8. Under-prioritizing risk-reward ratio

This is one of the most important parts of stock trading and yet very few stock traders calculate the risk-reward ratio. Don’t be one of them!

The risk-reward ratio helps you effectively manage capital and maximize returns. It outlines in numbers whether a trade is worth the money or not.

Prioritize the risk and reward relationship before getting into any trade.

9. Trying to make quick money

Stock trading won’t make you rich “quickly”, as is the general perception among the beginners.

It’s a legitimate way that demands hard work, consistency and a lot of learning in order to make you a significant profit.

The stock traders must do away from this “quick money” mindset to streamline and prioritize their strategies and goals properly.


These are nine possible reasons why stock traders will lose money in 2020.

To avert that, to maximize your returns – if you see yourself making any of these mistakes, take corrective measures.

Remember, your advanced strategies and analysis won’t exactly work if you aren’t adhering to the fundamentals of the game.

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