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Why do traders lose money in Intraday trading?

Intraday Trading can help you churn out huge profits, however, one should also remember that it is a highly risky task. According to several estimates, approximately 90% of intraday traders lose money. Because they don't understand market swings, most intraday traders end up making poor decisions and end up losing money. Many Indian stock market loss tales have been caused by simple intraday trading errors including averaging your holdings, trying to outsmart the market, overtrading to recoup losses, concentrating too much on hot recommendations/tip providers, etc.

In this article, I have discussed the top five reasons why traders lose money and how you can avoid making these mistakes.

What is Intraday Trading?

Intraday trading refers to the buying and selling of stocks within the same trading day.

It is short-term trading in which the traders take advantage of price fluctuations in the stock market and thus they earn profits.

But to be successful as an intraday trader one needs to know how to do technical analysis and understand their risk appetite for making profits in intraday trading.

Intraday trading can be done with stocks, derivatives, currency, or commodities.

5 Common Mistakes Traders do while Intraday Trading

1. Lack of Discipline

An intraday trader must stick to a proper plan. A complete intraday strategy contains profit objectives, things to think about, techniques to set a stop loss, and tactics to pick the best trading times. The trading strategy offers a thorough summary of the ideal trading procedure. With the performance analysis of each stock at the end of the day, you can also keep track of the transactions that were made during the day. These data assist you in locating and strengthening your trading strategy's weak points. As a trader, it is crucial to practise discipline since it will help you reduce losses and preserve your wealth.

2. Failure to set a stop-loss

Stop-Loss assists in preventing traders from suffering a significant loss.

A stop-loss order is a type of order that allows traders to tell their broker to sell stocks for less than they paid for them in order to cut losses. Intraday traders might limit their loss if the market movements are contrary to their expectations because this order is instantly executed. However, some inexperienced traders fail to include stop losses in their deals, which causes significant losses. One should want to maximise earnings as a trader, but one should also seek to limit losses.

3. Heavy Dependency on Telegram Tips Providers

These days, there are many daily suggestions spread via digital media. It is usual for traders to depend on these outside recommendations, but this should be avoided. The ideal technique to learn intraday trading is to progressively gain knowledge of charts, structures, and result interpretation. Many traders fail to make these attempts, which causes them to come out on the losing end of the deal.

4. Averaging on Losing Position

This is one of the common mistakes in the trading community. When a trader incurs a loss, he/she either tries to average a position or overtrades excessively to recover the loss. This further leads to a greater loss and puts them into more trouble. Losses are a part of intraday trading, instead of overtrading, it is wise to accept the loss, analyse the strategy and make improvements from the next day.

5. Trading Against the Trend

Long-term investors occasionally benefit from trading against the trend since they have more time to analyse the market and identify potential trends. However, the greatest strategy for day traders is to trade with the market's momentum. Day traders typically utilise trading software to automate the trading process since they must respond rapidly to profit chances. Learn to read charts and time the market over time if you want to excel at day trading. The phrase- “Trend is your best friend” always works in the stock market. Not following the trend is the biggest mistake that day traders make.


As we've already discussed, traders should develop a strategy before initiating trades, set stop losses to limit losses, never trust in tips and most importantly, follow the trend. I sincerely hope you all liked my blog. Stay with us for more blogs like this.

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