Gann believes that there are three main reasons why most people lose money in the stock market: ① excessive trading or too frequent buying and selling;
②No stop loss order is used;
③Little knowledge of the market.
W.D. Gann (William Delbert Gann) is a famous stock trader and market analyst. The three reasons he proposed for most people losing money in the stock market are profoundly enlightening and apply not only to the stock market but also to In the currency circle.
1. Overtrading or buying and selling too frequently: Overtrading refers to investors buying and selling assets frequently, usually out of emotional impulse or in an attempt to capture short-term fluctuations. This behavior results in high transaction costs, including commissions and taxes, and also increases risk. Gann believes that the reason why most people lose money is because they do not have the patience to stick to their investment plans, but trade too aggressively.
2. Failure to use stop-loss orders: Stop-loss orders are an important risk management tool that can help investors limit losses in the event of adverse market movements. Failure to use stop-loss orders may result in investors being unable to stop losses in time when the market falls, and thus suffering greater losses. Gann emphasized the use of stop-loss orders because it helps protect invested capital.
3. Little knowledge of the market: Understanding the market and investment tools is the basis for successful investing. Gann pointed out that one of the reasons why many people lose money is that they lack sufficient market knowledge. Failure to understand market fundamentals, technical analysis, fundamental analysis, and investment tools can lead investors to make unwise decisions. Therefore, it is very important to continue to learn and accumulate market knowledge.
These three perspectives emphasize the importance of discipline, risk management and knowledge. Investors should develop a clear investment plan, adhere to discipline, avoid over-trading, use stop-loss orders rationally, and constantly improve their understanding of the market. Regardless of the currency circle or the stock market, successful investment relies on correct methods and firm determination.