7 the most popular trading myths

There are many wrong concepts and assumptions about trading. Myths are created by both investors and public opinion. Contact with one of them, especially for beginner speculators, can be dangerous because it can completely change the way and view of the market. In this article we will refute the most popular myths and explain why they have no reflection in reality.

# 1. "Trading is about making money quickly"

This is the first of myths. Of course, trading is all about making money ... but not necessarily fast. A lot of controversy has arisen around this topic. There are opinions in society that investing is quick and easy. Stereotypes are so common that, unfortunately, many traders fall into them and start their adventure with markets with a completely wrong attitude.

As Warren Buffet said:

"Rule No. 1: Never lose money. Rule No. 2: Always remember rule No. 1. "

Trading is more about not losing money than making money. The key is risk control. First you must learn to protect capital and patience.

Be sure to read: How to calculate if and when to increase the size of a position

# 2. "You have to be a" champion "to make regular profits"

Another incorrect assumption. Trading is a puzzle of many elements, including mathematics and statistics. Unnecessary investing must be complex and complicated, and in spite of it, sometimes the simplest solutions turn out to be the best. Looking at the charts every day, we develop some intuition and analytical skills. This is really the only thing we need to have to earn regularly. Knowledge and a high intelligence quotient on the market mean nothing if we fall into overtrading, we don't control the risk of lack of discipline.

# 3. "In order to earn money you have to catch every pin and peak"

You don't have to catch the proverbial turning points in the market to earn. To make a profit, you need to be skilled at reading charts and understanding what the market is trying to tell you at any given moment. Very often the price goes back to key levels and once again gives you a chance to join the traffic. It is important that each item you want to open has its own context. This "game" is not about blindly catching support and resistance. The cake is very large, and for regular earning you only need to "bite" it piece by piece.

# 4. "You need a wealthy wallet to have a chance to earn"

There are opinions that you need a lot of capital to be successful. This is not true. You can lose money just as quickly in a large account as in a small one. At first it is quite the opposite - it is better to start with a smaller bill and develop appropriate trading habits. If you have a good strategy, you are organized and you know what you are doing, it does not matter whether you have PLN 1000 or PLN 100 in your account. Of course, money breeds money, it is much easier to earn big money from a large deposit than the other way around, but you shouldn't rush. Certainly, building a history of your transactions and gradually switching to more and more capital gives you a better chance.

# 5. "High efficiency is the basis of profits"

About this myth I wrote a little more in this article. It is not so much about effectiveness as about maximizing your winnings and maintaining a favorable risk / win ratio (Risk: Rward). You do not have to close every transaction plus to make a profit. This is a basic mistake that promotes incorrect approach to trading and is often the way to achieve the opposite effect to the intended one.

# 6. "Automatic systems and indicators are the best"

If as a trader you start exploring this topic you will realize that the best investors do not buy robots for trading. Unfortunately, there is no machine that will always earn. This is due to the fact that the market conditions are constantly changing, sometimes even very rapidly. If trading would be so easy that it would be enough to install the program, anyone could become a millionaire. What gives you profits and allows you to earn is primarily your mind and understanding of the reality that surrounds you.

Check it out: Why is it not worth buying systems on Allegro?

# 7. "Trading is like gambling"

I decided to leave the most popular myth for last. The truth is, if you want to gamble in the market, you can do it. However, a much better solution is to treat investing as a very demanding job, which expects you to spend time and perseverance to be good at it. When you go to the casino, your chances of winning are always the same. Trading is about using additional assets. For real investors, trading is based on probability, mental strength, and the use of your education, which has nothing to do with happiness. More you can read about trading that can become gambling in this article.