What Makes You Lose in the Share Market? And What You Should Do Instead
Over the past few years, trading has become increasingly popular. While some investors steadily grow their wealth, many others struggle—or even lose money. Understanding the reasons behind these losses is the first step toward becoming a successful trader or investor.
In a separate article, we cover the psychological side of trading. Here, we’ll focus on the practical, everyday mistakes that most traders make—and what you should do differently.
1. Understand Yourself and the Market
Many people get into trading after watching success stories or short videos showing people making quick profits. For example, someone claims to earn ₹2,000 daily, which seems like a ₹60,000 monthly income. Sounds easy, right?
But this mindset is flawed, especially for beginners.
First, let’s break that down:
The market is open approximately 22 days per month (excluding holidays).
Even experienced traders don’t make a profit every day. Let's assume 4 loss-making days in a month.
That brings your profitable days down to 18.
Suppose it takes you 3 good days just to recover losses from the 4 bad days.
Now, you’re left with only 15 net profitable days.
To still earn ₹60,000 per month, you’d now need to make ₹4,000 per day for those 15 days.
This target is unrealistic for most beginners. Trying to force such profits leads to poor trade decisions and inevitable losses.
2. What You Should Do Instead
Trading isn’t about earning fixed daily or monthly income—it’s about consistent, disciplined decision-making.
Here’s what that means:
✅ Know the Market Trend
Before taking a position, identify the market trend:
Bullish (uptrend)
Bearish (downtrend)
Sideways (range-bound)
Your trades should align with the trend.
✅ Understand the Underlying Asset
If you're trading F&O, analyze the underlying index or stock. If you're trading equity, understand:
The specific stock's trend
Sector performance (e.g., IT sector for TCS)
News and events affecting the stock or sector
Example: If you want to trade TCS, but there's negative news about the company—even if the IT index is bullish—TCS might not move upward. Always check for stock-specific news.
3. Define Your Entry, Target, and Stop Loss
A trade should never be based on how much you want to earn. Instead, base your target and stop-loss on proper technical or fundamental analysis.
Set your stop-loss at a point where, if the market hits it, your trade thesis is invalidated.
Your target should provide a good risk-to-reward ratio (e.g., 1:2 or better).
Use limit orders and stop-loss orders, not mental notes. Once you're in the trade, emotions can take over.
Golden Rule: Don’t risk more than 2% of your capital on any single trade.
4. Position Sizing: Enter in Tranches
Don’t invest your entire capital at once.
Let’s say you plan to buy 100 shares. Don’t enter the full quantity at a single price. Instead:
Start with 20% of your intended size.
Watch the market’s direction and confirm your analysis.
If conditions remain favorable, gradually add to your position.
This approach protects you from sudden reversals and increases your flexibility.
5. Timing Your Trades
Market behavior often follows certain time-based patterns. For example:
🕙 Morning Confirmation (10:00–10:30 AM)
By 10:30 AM, the market’s initial direction usually becomes clear. Use this time to:
Analyze volume trends
Confirm price movement direction
Avoid premature trades at market open unless confident
If a stock opens near your planned entry level, you can start with a small position and scale up as the trend confirms.
🕝 Afternoon Checkpoint (2:00–2:30 PM)
This is when many intraday traders begin to square off their positions.
Check whether your target is likely to hit.
Assess price and volume.
Decide whether to exit, adjust your target, or hold.
6. Price + Volume Beats Indicators
While technical indicators are useful, price-volume action often tells the story more accurately.
Consolidation zones on charts (where price moves in a narrow range) are critical.
Combine this with volume spikes to anticipate a breakout or breakdown.
Experiment and identify which indicators work best for your trading style.
Summary
Success in the stock market isn't about quick wins or earning ₹X per day. It’s about:
Gaining experience over time
Developing your unique system
Understanding market structure
Managing risk consistently
🎯 Stay in the market for 5 years actively. Experience will teach you more than any video or book.
"In trading, it's not about being right every time—it's about being profitable over time."
Stay tuned!
Happy Trading!