---
title: 'Stock Market Mistake Report: How to Fix It'
source: 'https://youtube.com/watch?v=LM0b8Ox9Ch0'
video_id: 'LM0b8Ox9Ch0'
date: 2026-08-19
duration_sec: 1739
channel: 'DAY TRADER తెలుగు 2.0'
---

# Stock Market Mistake Report: How to Fix It

> Source: [Stock Market Mistake Report: How to Fix It](https://youtube.com/watch?v=LM0b8Ox9Ch0)

## Summary

This video explains why 90% of traders lose capital, focusing on stop loss and risk management. The creator draws on research articles to highlight that trader psychology and misuse of stop-losses are primary causes of losses, rather than market operators.

### Key Points

- **The 90% Loss Rate** [00:12] — The video begins by questioning why 90% of traders lose capital, suggesting it's due to psychology or poor stop-loss practices.
- **Psychology and Stop Loss** [01:22] — Research shows that revising stop-losses based on percentages can lead to poor outcomes. Fixed stop losses are recommended to increase success probability.
- **Stop Loss Defined** [05:06] — Stop loss is compared to a seatbelt or racing gear—it's protection that prevents a single bad trade from erasing capital.
- **Stop Loss Hunting** [05:22] — Many traders believe operators trigger stop-losses, but only ~20% of stop losses are operator-driven. The rest are due to inherent market volatility.
- **Inherent Volatility** [08:11] — Market movements from FIIs, DIIs, retailers, and HNIs cause volatility that triggers stop-losses. No system has 100% profitability; losses are part of the game.
- **Stop Loss Types** [11:05] — Types include price action-based (swing points, breakouts), indicator-based (EMA, Parabolic SAR), and percentage/point-based methods.
- **Placement Strategies** [14:02] — For intraday, place stop-losses close to entry; for swing trading, use swing highs/lows. For options, use percentage-based stops due to theta decay.
- **Using Buffers** [20:56] — Adding a buffer (e.g., 20 points for Nifty) beyond resistance/support helps avoid stop-loss hunting. 
- **Risk Limits** [22:32] — Set daily max loss limits (2% of capital intraday, 10% monthly for swing). If a stop is hit, avoid over-leveraging and reassess strategies.
- **Position Sizing** [24:48] — Risk per trade should not exceed $400 if max daily loss is $2000. Adjust quantity based on stop-loss points, not the other way around.

## Transcript

in the first 90 days, The 90-90-90 rule, Let's assume this is true for a minute.
Are they really losing their capital? Are 90% of the people losing their capital? What could be the reason?
or their psychology is sinking into the stock market. what could be the reason for this? I am going to answer them in today's video.
we are going to talk about stop loss and risk management. is not from my own trading experience. International Research Articles,
Even in our India, I found some research articles. How is the probability of those who trade without stop loss? even if you keep stop loss,
in most of the research articles, I am going to share the probability of those who have studied for a few years, One of the important points that I understood after seeing these research articles,
we buy certain percent and keep the stop loss at a low level. We keep the first stop loss. we revise the stop loss.
Maybe you don't understand this graph. the more percentage we keep, let's say, after the stock moves 5%,
The more percent of stop loss we keep, And we shouldn't keep the stop loss at a certain percentage. And we should keep the fixed stop loss at a certain level.
The data that shows that the probability of success is high, It's not like you are going to explain those three research articles. Their observations are different.
we explain all that and talk about it. In fact, they have the results that they are telling us. but also the data that they have mentioned,
can sustain and be stable in the stock market. even if they have a lot of knowledge and strategy, They don't like it and the market sends them out.
We are going to cover a lot of topics in this video. How should our psychology be when placing it? Then, types of stop loss.
Stop loss is the thing that is said to be the most important thing to avoid loss. After knowing the types, Finally, beginners.
90 times, I am personally giving this to beginners. We should talk about this in the upcoming times of Risk Management in our equity series.
But again, I will explain this too after talking about a lot of concepts. I am an important rule for beginners. Or how to do risk management?
Now, let's talk about stop loss. if you find our efforts valuable, What is stop loss?
Have you seen people riding bikes on racing tracks? Do they drive with proper gear?
they will also have proper gear. Even if they crash, they will have a special helmet. They can go without all that.
if they are skidding, If they are skidding, they don't need to race. Not only that,
When you are riding a car, you wear a seat belt. Even when you are going out, you wear slippers. they should not disturb our life.
If there is a point where they get disturbed, Similarly, in the stock market, If we go against it,
If we don't face the loss when it is wrong, You understood what stop loss is, right? why is stop loss hunting happening?
The stock went up a little, Why is it going to the target after hitting my stop loss? the operators came and hit it.
They pushed me towards loss and went ahead in the trade. we should remember one thing. How many traders are trading in these thousands of stocks?
Yes, there might be operator-driven activity, but don't think that they are the reason for everything that is happening. we think that the operators did it.
So, if we put it on operators like this, What is the mistake that they are doing? There is a priest.
His son will wake up and see the tiger coming. He will sleep again. He is lying multiple times.
Even if the tiger comes and eats the sheep or the sheep, If we keep on saying that stop loss is hitting, They will be adamant and try to fight to see what is happening in the market.
Yes, we put it on. Stop loss. Then, trade. Next is trade. It went like this.
If we avoid stop loss with the mindset that it will be different this time, the entire capital will be eroded. don't think that it is only the back operators.
Who should they tell? The operators will impact the stop losses. like 1000, 980,
even if we push the price down a little, the availability of the system is less. and put an order to sell if they come there.
to close the next stock. even if I buy it previously, the selling quantity comes into the system.
Such activities will happen. operators will not think it is an activity. rest of the 80% will be hit by the stock market's inherent volatility.
it will go to the top side, Because, at what time, FIIS, DIIS means mutual funds, retailers, HNI.
so, the market will be driven by inherent volatility. If you think like this, So, the system you believe in,
it is not 100%, right? it gives 70% profitability and 30% loss. 3 trades loss,
This is not done by any operator. even they are not profitable. No trader has 100% profitability,
So, out of 7, 3 trades, 4 trades stop loss, If we accept it as normal,
and when you hit 2-3 stop loss, You will move to another strategy, That's why, I told you previously,
You should do paper trades for 3 months, Success rate and failure rate. 6 trades in 10 trades are profitable for me.
80% is very rare strategies, systems. it is an extraordinary system. System in the sense,
Accept it, stop loss is a normal thing. we are wrong, we are doing a mistake, or else, you can't see the consistency
That's why, this happens all the time. these mistakes happen all the time. How many trades are profitable,
my risk reward is good, and come to a conclusion, don't change the system,
and if you find out if it is better or not, if 4 trades hit, Don't have the mindset of trading without stop loss,
there is a chance of losing all capital. we learned what mistakes should not be made. Let's open a chart,
Here, resistance broke out, buy it, What are the types of stop loss?
putting stop loss in swing, These are based on price action, I want to put stop loss at 9 exponential moving average.
it is 17,763. so in 15 minutes time frame, I have 17,763,
So, price action based, not these, percentage based. if I buy and if the stock falls,
let's say I should not have loss more than 2% of my capital, I will give you full clarity when the video ends, Starting indicator based,
This is percentage based or point based. 50 point stop loss or 100 point stop loss, we can put stop loss.
they will use each and every set of stop loss. if you are not confident about price action, use indicator based stop loss like parabolic hour,
You will understand what you have experienced in price action. bullish or bearish, we have discussed all these in our channel.
If you are new to this, and try to keep your overall capital protected.
you will understand what to do after losing so much. Many people are asking what to do after losing so much. The common mistake they make is,
It will recover and recover and recover. It may happen once or twice. Don't get emotional.
Follow it with dedication and discipline. maintain stop loss as must and should, Where do you give way to lose capital?
Now, let's learn how to place stop loss. this is swing. it is enough to place the breakout candle below.
One is based upon intraday and swing trading. Are you trading in equity? Are you trading in buying?
We should not follow price action. Don't place stop loss depending upon price action.
Now, let's talk about intraday and swing trading. If you are placing it as stop loss, it should be very close to the position you are placing it.
You are planning to buy. If you buy here, you place stop loss here. will it go up in reality?
How will we place stop loss in swing? you place stop loss depending upon candle. it should be very close to your entry.
you should be able to give the recent swing high You should be able to give the next resistance. you should place swing high in swing.
Place it as stop loss in intraday scalping. Because, there will be a big stop loss. Place swing if it is close.
then place it in breakout candle. If not, place it in breakout candle. Don't prioritize swing.
If you place low swing, If the risk reward is unfavorable, If you feel it is a good breakout,
If it is close to you, place it in breakout candle. If it is close to you place it as high stop loss, You can take trades based on percentage or candle.
So you can take the same stop loss, And you can take trades based on candle as well. Will the target match with our stop loss?
and no matter how good your trade is, that means you are entering with If you are doing swing trading, you can follow any of these.
You can go with candle, swing low, swing high, or indicator. You can go with these methods in swing trading or positional trading.
But personally, when I want to do swing trading or positional trading, I only do it with intraday based on percentage or points.
But I wanted to talk about the whole concept. So, if this is the difference, I hope you understood. Equity, futures, option selling.
Whether you are trading in equity, selling options, open charts or spot prices related to those. If I sell, I bought.
If this breaks, I will exit. But if you do it based on price action while buying options, Why I am telling you is,
In that too, theta, time decay is very important. You bought it at 10 o'clock in the morning. That call of 100 moved to 140.
40 points increased here. But 40 points won't fall here. total 140 points can fall.
You should always put stop loss based on percentage or point in options. 20% stop loss means 80.
30% stop loss means 70. If we don't track option buying by revising stop loss, it will be very difficult to buy.
and it takes a U-turn in the same way, So, let's talk about trailing stop loss in the next video. try to observe trailing stop loss concept in the next video.
whether you are buying or selling futures, you can use any other technique based on price action or stop loss. try to put percentage or point based stop loss.
If you are watching this video till now, you must have got an idea. A good candle has formed. Every high after next is mostly higher side.
Resistance has increased. You are trying to put stop loss here. Where can you put stop loss conveniently?
Because it didn't break the last two swings. What I personally do is, This break out candle is lower than that candle.
This candle, right? Taking it in intraday. this green candle low breaks,
If I don't look at the screen, The theme I want to tell here is, in the previous candle low,
let's say I want to put stop loss here at this level. I will put some points above resistance, stop loss, buffer. So, when we are thinking of a point,
taking support and resistance as reference, I will put it a little above this level. You can use ATR or parabolic R.
But I am mentioning how I put stop loss. if I have 30 points after nifty, Because sometimes it hits exactly at the resistance.
I will take some risk from there and put stop loss with 20 points of resistance or buffer from the support. if we take a little buffer from that level,
if there is a chance to move in the market or the direction we think, We should enter the risk only when there is a reward. So, this is the best method to put stop loss.
They mention candle below stop loss as swing high above. Take a little buffer. for that, 20 points nifty buffer,
Or if you are in some stock, If it is a big stock, give 5-10 points buffer. I have told you ATR video.
you can place stop loss at a distance of all your points as buffer. Friends, I will tell you this concept very simply. But, there will be a video explaining risk reward or risk management.
I will explain the remaining topics along with this topic in a clearer manner. At any point, if you are an intraday trader, you should not lose more than 2% of your entire capital on that particular day.
You can trade a lot with 1 lakh. Either you are adding all those things, Here, it is 2000.
then it will take you out of the trading quickly. there will be some worst days. The technical analysis strategy or option strategy that follows,
So, we set a limit to our entire capital. This is very important. If I say 2%, you should set a limit of 3%, 4% or 5% or something.
And, beginners, do not go that far. But, in the starting stages, If you are doing swing trading,
do not lose more than 10% of your entire capital per month. do not lose more than 2% of your entire capital per month. fill the money that comes from your regular business or job
In between, break down the mistakes that you have made in trading. If I lose 10% in a month, I will take a gap of 1 month
In between, I will have time to think about the mistakes that I have made. If your salary is 20,000, you will not be able to fill the 10,000.
At no point, the amount that you are filling should not be more than 20%. you should analyze the mistakes that you have made in between. That will help you to keep you successful in the coming months.
If you have a max loss of 2%, that is, 2000, If you have a max loss of 2000, you should not lose more than 400 per trade.
You should not lose more than 400 per trade. You might have ended the profit in some trades. and increase the risk in a trade.
You should also have a max capital loss of 2000. you should not lose more than 400 per trade. You should not lose more than 400 per trade.
Stock 1. You can trade in 500 rupees. Simply, my max loss is 400. we can see how much quantity we should trade.
we can stop the loss wherever we want. If we want to control the risk, we should control the quantity, Multiple stop losses are different.
Stock 2. It is at 500. My risk per stock is 400 divided by my stop loss points. Stop loss is 195.
So, 400 divided by my max loss per stock is 400 divided by 5. Stop loss is 98. I can trade 200 quantity.
We always change the stop loss. We try to control the risk. If we do risk reward like 1 is to 2 or 1 is to 1.5,
the capital will definitely grow over the period. The max loss which we give per trade will also change. We should increase the quantity.
But, if you try to trade for the leverage, you will get trapped. I will explain this concept in detail in the upcoming times. we keep the stop loss at a point and then trial it.
In the case of traditional stop loss, if we keep on trialling between 15% and 20%, if we keep on revising our stop loss by 15% and 20%,
This research shows that there will be good results. particularly if someone is buying, as per my experience,
the results will improve a lot, We will lose all our gains and end up in losses. we can close the trade even better.
We might get a hit and exit stop loss. we might get a exit from the trade even if we don't want to try. In the next video, we will talk about trialling stop loss.
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