Why Consistently Profitable Stock Trading Is Difficult
It is a challenge to consistently squeeze profits out of the stock market, especially when you are new to trading stocks.
Disclaimer: financial information is not financial advice. This post is for informational purposes only.
It is a challenge to consistently squeeze profits out of the stock market, especially when you are new to trading stocks.
Why is profitable trading difficult, when it seems so easy? It seems easy, because what a trader does, at the most basic level, is click a button to buy a stock, and then waits to sell it for a profit – easy!
But it's not quite that easy. After all, if trading was really that easy, then everyone would do it, and we would all be rich!
So then, why is trading difficult to make consistently winning (profitable) trades?
Emotions Dictate Decision Making
One common reason profitable trading is difficult for many traders, especially in the retail space, is that emotions dictate a trader's decision making process.
Many traders, especially new ones, whether that realize it or not, are likely allowing subjectivity into their trading; where subjectivity is in the form of emotions.
Emotions are subjective, in that they are your own, and in the context of stock trading, come from outside influences, such as from market swing lows and highs, or the emotional influences and opinions of others.
When a trader is not trading with objectivity, they are allowing their trading to be influenced by the swing of emotions that sway the stock market up and down.
To trade objectively, without emotion, check out the article below:
Kyle J. Novak
Retail Traders Lack Trading Tools
The retail trader has historically been at a disadvantage, relative to the institutional trader.
Retail traders typically don't have access to the same tools and resources that institutional traders have. And because of that, institutional traders have an edge over retail traders in the stock market.
At Stocksift, our mission and goal is to help retail traders level up their stock trading skills. We provide trading tools that help give the retail trader an edge.
Not Enough Practice
Like anything, practice makes perfect. To get good at something, such as a sport, or even stock trading, you have to practice at it.
Many new traders, with the allure of quick and easy profits, go straight to opening a brokerage account and begin trading their hard-earned money.
Doing that is typically a good way to lose your money, unless you have prior experience, practice, trading knowledge, or are guide by the advice of a financial professional.
Instead of trying to get good at trading the market while risking your real money, it is better to first practice trading in a stock trading simulator.
By using a trade simulator, you are able to practice many different trading scenarios without risking your real money.
It is a mistake to assume that you will be consistently profitable right out of the gate when you are totally new to trading.
In the same way that an inexperienced pilot should not fly a new, large aircraft without first practicing, such as in a flight simulator, nor should a new trader start trading using real money without first practicing in a trade simulator.
Once you are consistently profitable in a stock trading simulator for 6-12 months, then it is a reasonable assumption that you have acquired the skills to try stock trading with your real money.
Conclusion
Consistently profitable stock trading is difficult because of the following common reasons:
- Emotional trading,
- Lack of trading tools,
- and, not enough practice.
Emotional trading is when a trader is allowing their emotions to dictate when they enter and exit a position. Objective trading is the solution to this common pitfall.
Retail traders typically lack an edge in the market, due to a lack of trading tools. Without the right tools, it is difficult to be consistently profitable in the market.
And finally, without practice, a trader cannot reasonably expect to reach a high level of trading.
Level Up Your Trading Skills!
Everything you need to level up your stock trading skills, in one easy-to-use, streamlined platform.