Why People Lose Money in the Stock Market

Investing in stock market is very rewarding financially but also very risky. Many people lose their money in this particular investment because they do not have any knowledge about picking the right stocks.

There are many reasons why people lose money in the stock market, such as the follows:

1) Trading with money you can't afford to lose is a sure-fire way to lose money very fast.

2) Buy more stock when it drops in price: Beware of the significant drop in price performance. If your dropping stock is in very low demand, the share price might be getting lower and lower, and you will end up with big losses.

3) Making investment decisions based on emotion rather than strategy can be a costly mistake.

4) Don't know when to sell: If you don't know when to sell your shares and take a profit, then your profits can be turned into losses (sometimes massive losses).

5) Lack of knowledge: Many beginner investors lose money trading stocks because of their lack of knowledge and skills to make profitable trades.

6) Not having a proper trading plan: Without a plan, you are more likely to fail and lose money.

7) Don't know about fundamental and technical analysis: Fundamental analysis is a method of forecasting future price movements based on relevant factors and data. On the other hand, technical analysis focuses on the study of price movements and past market action.

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