Trading is a word that is popular these days and people are also promoting trading as a quick-rich scheme. But have you ever thought “Can I Become Millionaire by Trading”?
In short, you cannot become a millionaire by trading because 80% of traders lose their money over 12 months, according to eToro.
But have you ever thought about why this happens?
In this blog, we are going to learn how to minimize risk while trading and book as much margin as you can.
Table of Contents
Mistakes that 90% of traders make
Here are some mistakes that you may make as a trader:
Lack of education
A trader earns profit based on the right decision he makes in a few seconds. The right decision comes from knowledge. Most traders jump into the market without a deep understanding of market dynamics and trading strategies.
When a trader does frequent trading, the transaction’s cause increases, and at the same time, the risk also increases. While trading, you have to be more aware and find the correct time to decide whether to buy or sell a particular stock.
Lack of risk management:
while trading, you have to understand your risk tolerance so that your potential losses do not harm you. You can also set a stop-loss order to avoid major losses.
if a trader does not have any experience, he can be manipulated by greed and fear. A successful trader always maintains discipline and sticks to the plan.
No trading plan:
when anyone enters the market without a trading plan, there are high chance that they will fail. The trader should always set a limit on when he should take entry and when he should take exit.
Chasing the market:
Most traders buy stocks based on current trends, but they do not analyze the company, and this results in buying stocks more than their actual value and selling quality stocks at a lower price.
Using fundamental and technical analysis:
I would recommend every trader to read books on fundamental analysis and learn how to analyze a company. So that when you buy any stocks, you can find the actual value of them and what the current price is offered by the seller.
hurt mentality means when everyone thinks in the same way. For example, in COVID-19, a company named “Bombay Oxygen” saw its share price shoot by 256% because there was a shortage of oxygen cylinders in the market and traders blindly bought stocks of all those companies that had the name “oxygen.”
The show shows that mentality can influence your decision and end up costing you money.
Also Read: In which bank did Sandeep Maheshwari Invested ?
How do you become a smart trader?
Here are some points that you can follow to become a smart trader and earn a lot of money.
Trading plan: while entering trading, you must be sure about your strategy and make a trade plan.
Use stop-loss order:
You can manage your pressing this by setting a stop-loss order. If you lose, you won’t be affected by losses.
Here are some books that I would highly recommend to increase your knowledge of trading. And those are
- Common stocks for uncommon profits
- One up on Wall Street
- Reminiscence of Stock Operators
- Japanese Candlestick Charting Techniques
- Technical Analysis of the Financial Market
- The intelligent investor
As a stock trader, you have to understand the mindset of the news and causes around you and how they are affecting your mindset. A successful trader never came under the influence of any fake news or gossip.
frequent traders always suffer from losses. Try to be that trader who enters rarely in the market books enough profits and leaves.
Can I become Millionaire by Trading?
Trading is a skill, and if you want to become a millionaire, you first have to learn the art of trading, and after gaining enough knowledge and experience, you can become a millionaire. But don’t forget that most people lose their money in trading, even if they are experienced.
Overall, trading can be a path to becoming a millionaire, but it takes time.
Is trading a way to get rich?
Trading is a skill, and without learning it, you won’t become a successful trader.
Is trading worth a career?
Yes, trading is worth a career and can also be pursued as a part-time income.
Is trading easy or hard?
Trading is tough, but if you learn it, it will become easy over time.
Conclusion: Can I Become Millionaire by Trading?
The answer to this question depends on experience. Let’s say if you learned enough about trading from mentors and books, then over a period of time you’ll earn a lot, but if you don’t have experience, then there are high chances that you’ll be successful in trading.
To become a successful trader, you must understand the emotions of the market and the actual value of the company.
Most people think of trading as a quick-rich scheme, but trading is all about skills and experience.
Overall, we can say that you can become a millionaire by trading, but first, you should learn the fundamentals.