It seems there is nothing that will ever go without myths on this planet. Even for financial traders, some myths keep obscuring their vision of trading. According to the senior financial advisor at Wilkins Finance, the myths affect both experienced traders as well as beginners.
Most of the myths have a very negative effect on the way people perceive financial trading to an extent that some give up trading just because of them. Maybe it is something that you hear from your peers or incorrect information that has fallen into your lap from the internet. This can make you feel negativeabout the financial markets and you may even feel it is just a scam.
However, true it may be that financial trading could be quite risky, most of the bad things propagated about it are wrong and you should avoid letting it affect your judgment during financial trading. Below are 6 financial trading myths you should never believe if you ever want to be successful in your online trading business:
Financial trading is a place for “get rich fast”
Am sure most of you started online trading after a friend of your told you there is a place you could make money quickly. Some of the information online tend to mislead beginners when they see an online video of an experienced trader who has invested may be a million into his/her trading account making about $10,000 profit per trade and the beginner thinks that he will also be making such amounts. There are a lot of factors which go into play in the online trading and some of them are amount invested, experience and the kind of trading strategy that you use.
You should take financial trading just like any other business investment that includes making losses and profits. The only thing that you have to maintain is a better record of profits than loses.
There is a Holy Grail online trading strategy
You will be astonished that even some very experienced traders believe that this is true – that there is that trading strategy that will never make losses. You should never be deceived any trading strategy can make losses and huge loses for that matter!
The only thing that you should look for is the frequency of the losses and the profits. If the strategy makes more profits than loses, then that is a strategy you should keep since by the end of the day you end up with profits. However, if the opposite is true, you should completely do away with the trading strategy and look for a better one.
No single trading strategy will make 100% profits. This applies even to the much-praised trading expert advisers. Sometimes traders think that if only they would get that trading expert adviser, they would never make losses. Even the most profitable financial trading “robots” make losses at times. The thing is they don’t make too many losses and at the end of the day you get something to smile about since there are higher profits than losses.
To make money in online trading you need to be a genius
Some people look at the charts and they seem to think that traders are responsible for all that is happening on that chart. Some people even fear the charts from the complexity they tend to portray.
But you should understand that everything you see on the chart is the work of IT and financial experts. The trader only presses some buttons here and there.Online trading can be done by anybody, irrespective of your academic credentials. You only have to learn how to trade and be disciplined.
You can always make a fortune trading financial releases
After financial news releases, the markets tend to move very much and once traders see those past movements, some of them make up their minds to wait and trade next time there is a news release. They tend to imagine how much they would have made if they had a trade at that time.
But as a trader, you should remember that the success of your trading is determined by the choice of trades you put. In most cases, you will end up making the wrong trade during a news release and you will end up making huge losses. And again, the markets are usually very volatile during news releases and your stop loses may end up being hit even if the market will end up moving in your favour.