Why most of the people lose money in Stock Market?

Common Questions and Answers that might have come to your mind?

1. Market is at 8000 after falling from 21000.Should I invest now ?

Market has risen to 18000 So is it the right time to buy ?

1.What most people will say and do - If it has fallen to 8000 it can fall to 6000 too and I can lose a lot of money .So why should I invest now.

Oh it has risen to 18000 ,I should have bought at 10000. Now if it falls to 12-13000 I will buy.

Now suppose if Market rises to 23000-what they will say " I think this is the last opportunity otherwise I would be considered fool, so buy now".

Probabilistic - I am not saying that anyone who will buy at 23000 will be fool. The Point I am making is its better to buy an economy when we are getting at cheap levels as risk reward is also in your favor at that time if you believe in the growth of that economy .

2. I invested in stock "A" at Rs 100 now its Rs 120 and also I invested in Stock "B" at Rs 100 now its Rs 80. Which stock should I sell and which one should I hold.

2. What most people will do -Sell the stock A at 120 to book profit (It is Psychological satisfying) and keep holding stock B expecting that it will rise.

Probabilistic - You should cut your losses and let your winners run.

Conclusion: The point I wanna make is that people don't make mistakes by chance or by bad luck but our Psychology is programmed to behave in that manner in those situations. So stock Markets behave against human Psychology as it always leaves us on the other side of the fence.

One more point I want to make is Stock Market is the only place where 1+1 is not always 2 so you need to follow the probability to succeed.