There are a lot of trading myths out there that you need to know. Let’s look at the top 7!
Nothing could be further from the truth. By watching the charts for hours and hours you are more likely to dip into the markets at the wrong time.
There are only so many good trading opportunities in any given day. They don’t just magically appear when you are doing your long screen time and you end up feeling that you have to do some trades or else all that time watching was wasted.
This is when you end up making bad trades and lose money. Most professional day traders have done all their chart analysis before the markets have even opened and are waiting for the price to reach certain levels before they take action not actively looking for trades without per-planning.
More screen time generally means more trades. More trades does not necessarily mean more profits
Although there are thousands of charlatans online claiming that they have a magic trading formula the reality is that is does not exist.
There are trading methodologies that have a higher probability of being more successful than others but ultimately 80% of success in the trading game is down to risk management and psychology.
Focus on this first and see your trading profits soar!
The actual entry is less than 20% of the total trading decision process. You got the exit, the system, the risk management, the market conditions, the environment, the news and a few others you will need to get yourself up to speed with.
Don’t obsess about the entry, it’s only one cog in the trading wheel.
Overloading your charts with technical indicators will not help you identify where the price is likely to go next. Too many different types of indicators on your charts can give you conflicting signals and Keep it simple with your charts. A few technical tools like trend lines, support and resistance levels and moving averages are all you really need as long as its combined with a solid strategy for entries and exits.
Also getting a handle on the impact of news (both economically and politically) on the markets will give you a better perspective of what is going on and will take your trading to the next level.
It’s the trader that’s gambling not the trading itself. If someone is reckless, has unrealistic expectations and is not prepared to learn the game that’s a completely different conversation.
Trading is a skill that can be learnt, gambling is game of chance and luck. There is no comparison.
Professional traders don’t get every trade right. That’s a fact. Anyone claiming they do is probably selling a service related to trading and likely have never made any money from the markets themselves.
The difference between a pro trader and an amateur is that the the pro makes more money on his winners and less on his losers resulting in a healthy return on their investment.
Not true. You can start a trading account with $250 and grow it slowly. You need to put your account size into perspective and think more in percentage returns rather than dollar returns and see what this could lead to.
If a trader with a $250 account can make 30% - 40% a year with a low risk approach in achieving this type of returns that would be an incredible performance.
If they can’t invest more of their own funds they can use this track record to attract investors and trade their funds and charge a performance fee in the process.
What could this same trader do with a $100,000 investment?
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