Why So Many Traders Lose In The Market and How You Can Win!

So many traders…No. MOST traders lose in the market eventually.

They try all kinds of strategies. But in the end they are back to $0 or even less!

After that, they think that the market is a scam.

Here are their mistakes:

• They try to use luck and timing. The odds are against you!

• They follow other traders’ bets. If it were that easy everyone would be rich! 🤑 

• They are impatient. They want lottery style wins. Warren Buffett famously once said that the market is a place of wealth transfer, from the impatient to the patient.

I know this because I have also tried to win in this game with those short term mindsets. Conversely, just like those few who have found real success in the stock market, I, eventually came to the same conclusion.

Trying to make the highest return is not a very good thing to aim for because these types of returns tend to be one-off hits that can’t be repeated.

In order to sustainably make money in the market, you must have endurance. This means you must have a strategy that allows you to survive long enough for the odds to tilt in your favor.

Now there are a many ways to do this. They all work. It depends on what type of work your want to put in.

But they all involve in the following:

• Invest in companies with good fundamentals. Or use an ETF(A Basket of multiple stocks) with enough good companies in it that won’t all go bankrupt at once.

• Diversify. Don't need to over do it, but enough that you won't ever go broke if you made a mistake.

• Accept that market volatility is part of the price you pay for the returns that you want. Stay in it through the ride unless it no longer make sense.

• Don’t treat the market like a lottery ticket. Treat it like an investment.

• Have enough savings that lasts you at least 6 months. This will keep you behaving rationally, and not make hasty decisions.

With that as your core ruleset, many types of strategy would work.

Now, in terms of strategy. For most people the best thing to do is to Dollar Cost Average(DCA) into your choice of stocks and/or ETFs.

To DCA means to put a set amount of money into the market every set interval, rain or shine. For example, each month you get your paycheck, if you’ve got $1000 left over, put $500 into the market. Be sure that this is money that you won’t need to touch, this keeps you calm, and gives you endurance in the market.

When the market is going down while everyone is panic-selling their stocks for cheap, you will keep buying them up like things are on sale. In fact during market down turns, I would invest heavier than usual, because when the market goes back up I would make a lot more money. Just make sure you are investing in good companies with strong financials, or a quality ETF, and not some hype stock that is over-valued.

DCA allows you to have the least amount of knowledge and still be able to benefit from the long term upside of the market, without the stress of actively managing your investments. This can be easily set up to be done automatically every month so that you don’t need to do anything once it’s in place.

This is particularly suitable for those with a long investment horizon of 20+ years. Based on the last couple hundred years of how the market works. If you are in your 20s, by the time you are in your 40s, you would likely have quite a nice chunk of money in your possession, depending on how much you invest each month.

Having a big bank account means you have more freedom to do what you want, when you want, and how you want to. Don’t like your job? Just quit, and take your time to find a more enjoyable job. Don’t want to go back to a job? Use your money to make more money. This can be done in many ways, I’ll cover some of these in other articles.

For me personally, I enjoy being more active in the market since I don’t have to work for anyone anymore, I have time and freedom because I invested in my 20s.

Plus my strategy only takes a few hours a week. It’s not like with day trading where you’d have to be glued to the screen and be some sort of genius to succeed.

Without getting into too much detail, basically I use Stock Options as my preferred way of investing(Not trading). I like to use a small portion of LEAPS, and a larger portion of cash secured puts. Layering some special tweaks I learned from a couple of mentors I was fortunate enough to cross paths with, and it gives me an edge to outperform the market by quite a bit.

The details of my strategy is outside the scope of this article. At this stage, I just want to convince you why you should start investing to gain long term wealth, instead of losing money to whatever it is that you might be doing or not doing right now.

I will be going more in depth with my strategy in subsequent articles. If you are interested in that, or anything else relating to financial independence, stick around! Follow me so you get notified when I post something new.

Until then, I REALLY encourage you to start taking seriously the idea of investing in your own future. Because if you don’t take back control of your financial freedom, you will lose it for good.