Many of us will look for a smart investment plan besides our regular income. If you plan carefully, stock investment and stock trading can help you achieve financial stability. A proper understanding of the procedures and tactics is inevitable to succeed in this field. We should also be aware of misconceptions or myths about stock trading to eliminate them by filtering the facts.
Stock market myths are often conveyed by well-meaning but incorrect advice. People may counsel you against investing in the stock market if they are concerned about a few instances of loss.
These misconceptions will be referred to as "myths" for the sake of brevity, although they are incorrect beliefs that can be massively expensive.
Let us see few myths and filter the right information about trading and stock marketing.
Many would-be traders avoid the market entirely because they believe day trading is a pipe-dream. This group believes that all-day traders are condemned to fail. While it is true that 90% of the day traders lose their 90% of the capital within the first 90 days, it is because they jump into the water without knowing anything about it. Those who educate themselves and get trained end up in profits.
If you want to take bold initiatives in life, such as establishing a business or climbing a few steps in the corporate ladder, you should know that the situation might not be in your favor; similarly, trading also comes with its set of difficulties.
A few traders fail, yet this does not entirely rule out the possibility of trading success.
Often people think that active traders do have some deep secret, which they never disclose to anyone. And those who believe in such theories are skeptical about the entire process.
The above statement is a myth and let us bust it here for you
Most retail traders do not have hidden systems, algorithms, and strategies.
Traders do not see the market as a code that needs to be broken; rather than that, it is a chaotic system that gets navigated with the right tools, analysis, and risk management measures.
Successful traders do not have algorithms that spit out foolproof buy and sell alerts. Instead, they put-in the work, look for high probability setups, execute trades that meet their criteria and manage risk accordingly.
Some of the best traders only win 30% -40% of the time. However, they are successful because their winning trades are way bigger than their losing trades.
All you want to do is to:
Find a high probability setup
Account for risk
Take a win or a loss
Be consistent in doing this for a sustainable period of time
The combination of high probability setups and favorable risk/reward ratios compounds the trader’s favor over the period.
Another common trading misconception is that the markets are manipulated. Investors are entitled to ask if the stock market is rigged. Technically, the answer is of course: NO. The stock market is not rigged, but there are certain significant obstacles that you will need to overcome to be a successful small investor.
Trading is compared to gambling frequently, and the two activities may appear comparable at first look. This stock market myth is often circulated from various sources coupled with well-intentioned but incorrect advice. For example, people may warn you against investing in the stock market if they are concerned by a few loss stories. The analogy of the stock market to gambling, on the other hand, could not be further from the truth.
Gamblers make bets, and traders place trades.
Traders have more control over their "wagers" probabilities and have a better chance of winning than losing because of specific setups. In addition, traders can minimize randomness better than gamblers. Proven elements influence price activity, regardless of whether you believe the markets are efficient or irrational.
For most outsiders, trading might look like a rich man’s sport. We can see this outlook from many people. This does not seem right. You can start investing with a minimal amount of money. Your consistent profit from this little money will help you earn more and grow your portfolio with little trading activity. Once you start generating good profits, you can increase your account accordingly.
Most traders begin as part-time traders with full-time occupations – and it is entirely okay. We do not even recommend contemplating full-time trading until you have proven yourself over a more extended period. Various surveys conducted within traders show that most of them are part-time traders. But, if you work a full-time job, you must tailor your trading strategy to your limits, which will lead to the next step.
A process can be built around one’s trading, making it into a system. If a plan is established coupled with today’s technology, one does not need to spend their entire time in front of the trading terminal. A reasonable time investment of fifteen minutes to two hours a day is sufficient to earn a full-time income from trading.
Get started with an expert trader
A proper trading coaching or a long-term course includes all the nuances of trading. Any trading enthusiast or even a long-time trader can learn the in-depth trading principles by enrolling in any classes. You can use the knowledge required to interpret a company’s financial statements and understand the different transactions in the stock market to reproduce the techniques identified by the existing course curriculum.
Trade2Transform (T2T) conducts a comprehensive and super-premium program for only those who can handle the transformation journey. The three aspects of a person, an entrepreneur and a trader – over nine months are a complete coaching and mentoring program where the participants get trimmed, re-constructed, and fully transformed.
Where can a trading aspirant find the correct information?
As an individual investor, you do not have access to qualified in-house experts or research analysts even though there are seemingly unlimited financial and stock data available online. Worry not; there are a lot of other sources for relevant information. News plays a critical part in trading.
If you are looking to do some research on traders and Stock trading, look for portal by professional traders who manage their own money. Lots of free advice are available all over the web which can be confusing and irrelevant. Evaluate if the information provider is herself / himself a trader or investor first before following the information.
‘Trading is easy, and T2T will make it simpler.’ Sign up for our beginners’ trading program, Decoding Stock Trading (DST), to learn about trading. You can also join one of our free webinars titled "Trade to Freedom."