Let us find out the reason why retailers lose money year after year To find out that let's understand the 4 stages of any stock/index.
-->STAGE 1: .This is the stage where accumulation of the stock by FIIs and DIIs takes place and the price trades in a range bound structure ( as shown on the chart ) where buyers and sellers are in equilibrium. .This stage might last for many months and in some cases years. .Most of the retail traders exit because of frustration before the big movement takes place.
-->STAGE 2: .This is the advancing stage that starts after the breakout from stage 1 with a good volume. .The stock is bought at every dip and it heads higher forming a HIGHER HIGH and HIGHER LOW structure .Retailers exit on fear of losing the money earned.
-->STAGE 3: .This is the distribution phase of a stock where FIIs and DIIs book profits and the shares are distributed to the retail traders.
-->STAGE 4: .This phase starts after breakdown from stage 3. .The stock starts it's downtrend journey and at this stage many traders try to average the stock bought and therefore increasing the overall loss.
I hope this post helped you in understanding one of the few ways to get out of the trap retail traders are in and start your journey towards becoming a successful trader. Thank You for reading with patience Till then, Happy Trading :)