The Dirty Stock Market Secrets [Nobody Will Tell You]

Why I always lose money in the stock market? Why all my trades are going against me? If these questions are haunting into your mind, you must read this article till the end. Today, we will discuss the dirty stock market secrets which are known to the retail investors like you and me.

The Problem

You have acquired adequate knowledge about how to trade in the stock market, you also have mastered the tactics and methods which will surely make you win in the stock market. Still, you are losing money in the stock market. How is this possible? What is that you are still lacking? These are the common questions retail investors keep asking who has burnt his hands in the stock market.

The Stock Market Secrets

Well, let me tell you the secrets of the stock market. Trading has nothing to do with tactics or methods, but it has everything to do with….

It is not lack of knowledge, as knowledge is freely available today on the internet. There are thousands of Stock market books which can help you understand how to trade in the stock market and win. No one in this world is going to consume all the knowledge available on the internet. But, you should acquire at least basic knowledge about the stock market.

So it is not the lack of knowledge, the problem is what people are doing with what they know. Even after acquiring a good amount of knowledge, people are looking for tactics that do not fit their situation.

People start their day waiting for the market to open at 09:15 a.m. Most of us have already made a trading decision before the market opens. We have already decided that what trade we are going to execute today even before the market opens. This never works. Before taking any trade decision, there has to be a well-researched analysis behind that decision.

Lost opportunity is better than lost money.

In the stock market, about 95% of the people are losing money in a day trading. As a trader, you need to observe the market and make an informed decision. It is ok if you miss any money making opportunity. You will surely find another one. The market is full of opportunity. There are big players who are watching you closely.

They know which trade you are taking and in which direction. They initially trade in the direction of yours and then they will trade in huge quantity in the opposite direction of retail traders like you and me. So it is not good to take all the trade opportunity even if it looks lucrative. There will be always another opportunity waiting for you.

No trade is also a trade

You must trade with the market direction.

So wait patiently for the best opportunity and take trade according to the market trend. Moving with the market is very essential for making money in the stock market.  If the market is moving upward, you also should take a trade call in the upward direction and vice-versa.

As a successful trader, you must be making money consistently over a long period of time. Now you have a question that how to become such trader? For that, you must be stay focused and informed about the market direction, do your own research and trade with the conviction. The stock market is evolving constantly, so you will surely be making some mistake at some point in time. Everyone makes mistakes in the stock market, it is ok as long as you learn out of it.

To become a consistent winner in the stock market, you have a basic understanding of technical analysis, must be watching the market closely, and you should be an independent thinker.

The Market Setup

market setupThe stock market is designed in such a way that most of the people must lose money. There is no place for emotions in the stock market. So in order to trade confidently, have a plan, do your research, go with the trend.

Don’t simply jump in to buy or sell. Respect the market and it will respect you. Respect the capital you have deployed in the market. It’s your hard earned money.

People are mostly waiting for catching the top and bottom of the stock price. This will never work. If you are able to catch the stock at the top or bottom level, you are lucky this time. But it will not work most of the time.

Rather, let the stock settle at some point and then plan your trade. This way your probability of losing the trade is very less. When the market is moving up, we all think that it has reached its peak and now it will come down for sure. Never think like that.

Nobody knows if the market has reached its peak and it’s going to come down. Rather, let it take a break at some point and then see what direction the market is moving. If you find the market is consolidating, then buy at the lower price and if you find it’s moving upward strongly, then sell the stock at its peak.

No price is too high for the bull & no price is too low for the bears.

It’s Zero Sum Game

zero sum gameWhen the market is down, everyone is selling the stock or vice versa. So on the other end, someone must be buying that stock. After all the stock market is a zero-sum game. In this game, if everyone is selling the stock then someone must be buying, who are those people? why they are catching the falling knife?
This means a few big players are accumulating the stock at the lower lever as retailers are selling out of fear. This is the reason the stock will bounce back sharply after a huge decline.
So you should think that I am selling this stock as it’s falling down, why is that other person is buying the same even if it’s falling sharply? Asking this question will help you to re-evaluate your trading decision.
Selling = Buying, and vice-versa

Your Formal Education is Worthless

formal educationYour high school degrees will not work here in the stock market. You need to acquire the knowledge even if you are an MBA in finance. You need to unlearn what you have learned till date in your formal education.
For acquiring the knowledge, you will have to learn how to read the annual report of the company. Learn about the important terms of the financial market, government rules and regulations. Everything that is related to the stock market you need to learn.
You need to learn about the fundamental analysis of the company. You should be able to find out the company’s financial situation from its balance sheet. These are the basics of the stock market.
Don’t learn technical analysis too much as technicals can be manipulated by the big players in the market. I always suggest you stay away from the technical analysis. It is good to know but doesn’t follow the technical analysis of the company, otherwise, you will lose your money.
Unlearn what you have learned so far

Technicals can go WRONG

technical analysisFundamentals and technicals can be manipulated (recent examples of Vakrangee, PNB, P C Jewellers etc.) So don’t just rely on these parameters blindly. The stock market is moved by the institutions and high net-worth individuals.
Retail traders like you and me are not consisting more than 5% of the trades. This is the hard fact. So if you think that your trade is affecting the price movement of the stock, you are highly mistaken. You cannot move the stock price whatever you do.
big fishDIIs and FIIs are doing about 95% of the daily trade volume. You and I are like small fish in the sea. There are big fish like FII and DII is searching for us to swallow.
So you need to track their movement and try to identify what they are doing or going to do in the near future. It is not easy to understand their strategy and nobody will come and tell you their trade secret. So you need to keep researching on your own, keep your self-updated with the market news and events, and with experience you may try to evaluate what exactly they are going to do.
Big fish doesn’t see charts, they create charts


So now as you have understood the stock market secrets, you must use them to your benefit. Acquire some basic knowledge about the stock market. Do your own research, don’t try to time the market (finding tops and bottoms), go with the market trend. Do all these and I am sure you will never lose your money in the stock market.

Earning moeny in stock market is not hard, it is just losing money is easy.

3 thoughts on “The Dirty Stock Market Secrets [Nobody Will Tell You]”

  1. I have small amount of share of total amount of rs 80000 in various sectors and now going de valued.i am long term investor .do not do intraday so kindly help me for long term capital appreciation in moderate gain.


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