1. Greed. Enter stock market to earn unlimited money without any plan to earn consistent returns. Placing orders with No knowledge about technicals, no knowledge about fundamentals and with no idea about the business the stock performs.
  2. Margin trading. Again greed. Buying stocks with 20x margin, not booking partial profits and waiting to recover your previous day losses just to compound your loss. I am not against margin trading. There is need for skill and money management. One should be strong in technicals and understand the market movement.
  3. T+5 Margin: buying a stock in 20x margin and at end of the day lose 2%+ 0.16% on margin brokerage and convert to T+5 days just to lose another 5%+ 1.6%. Total 10% loss = loss of 50% capitial.
  4. Venturing F&O with little capital: F&O requires quite high capital to purchase a single lot at 5x margin. With less capital, one is subjected to high risk of lossing 50% to entire capital. To earn a consistent returns, diversification is required in F&O also. Some funds should also be kept to buy another lot on dips before the stock hits SL, anticipating reversal.
  5. Wrong/No stoploss. Ignoring to place a stoploss and averaging a losing stock till it becomes a penny stock.
  6. Pay High Brokerage. Paying 0.55% brokerage and trading short term. (Ends up paying 1.6% brokerage per complete trade). 5 trades a month, bye-bye 8% capital.
  7. Impatient. Selling a stock for no reason buying another. Just to see the sold stock rally.

This is how one lose money trading in the stock market. Please share to your friends to spread awareness. Please comment if you feel i have left out some key points!

How to overcome lose and earn money in the stock market:

  1. Learn: Learning is the best way to gain experience. Learn about understanding Fundamental of a stock and learn to understand the technical charts, even before you start investing.
  2. Experience: Enter the market with 10% of your investment capital, with experience of profit and loss, you will understand your potential and strategy to gain a regular income. Until then do not invest your majority of your investment capital, have them in mutual fund and bonds.
  3. Discipline: Make a set of rules and strategies to gain regular profits. Understand the minimum capital required to invest and capital required to backup your losses. Never invest more than 20% capital in a single short term trade. Forget your money if you risk more than 80% capital.


  1. I understand the technicals and outlook of the Indian stock market Index, I am currently bullish.
  2. I choose 5–6 sectors i am bullish on. NBFC, Banking, Housing Finance, Paints, Tyres, Consumer Durables, Oil marketing, Infrastructure.
  3. Now i go through the Financial charts of the stocks.
  4. Now study short term charts of the stocks within the sector and find cheaper stocks for short term (1 to 3 months.) If the Fundamental are really good, I will hold the stock for a year at least.
  5. Stocks that i have bought in last 2 weeks are LIC housing Finance, Repco Home, Berger Paints, Akzo Nobel (Profit booked and added weightage to Berger), Shriram Transport, Chola Mandalam, Bajaj Finance (Profit booked and added weightage to Chola), GIC Housing, DHFL (Profit booked and purchased LIC housing), MRPL, BPCL, Siemens, ABB, Balkrishna Industries (Long term Hold), Ceat, Hitachi, South Indian Bank, Lakshmi Vilas Bank (Profit booked), Karnataka bank (Profit booked), Andhra Bank (Profit Booked) etc.
  6. I keep reading books; to be honest after reading books, i have become little conservative in entering stocks at my will. Now i go through complete Technicals and Fundamentals. I used to blindly book partial profits and profits. Now i strictly follow technicals to book profits.

A journey towards being a Professional Portfolio Manager.

Please share if you like the article. Please do comment below on your experience, How one lose money in the stock market and what should one do to avoid losses and earn consistent profits?

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