Trading is a profession around which several myths have been weaved around. It is a profession in which you have to venture out with great care and discipline and most of your friends, relatives and other known will advise you against getting into the trading profession. One of the most common reasons associated with this skepticism is that people think that trading involves a lot of risks. The general public also has this view that eventually you are going to lose money in the trading. In this article, we are going to debunk some of the crucial myths associated with the profession of trading to help you become a successful trader in the long run.
1) All Traders Fail: The first myth is that all traders fail at one or another point in time. This is not true and in fact, a trader who trades by taking a calculated risk and putting the money following the market trends and patterns is unlikely to face any kind of failure in the long term. Short-term fluctuation could be there but in the long run, a trader who trades after taking into consideration all basic facts and figures will emerge a winner.
2) Markets will Rise: Another common myth associated with trading is the fact that the market will eventually rise after its crash. Hoping that the market will eventually rise might not prove to be a feasible proposition as the market sometimes could possibly take eons to bounce back. Therefore, you need to consider the investment in the stocks/markets which remain stable in the long-term rather than choosing stocks that are at the bottom of the valuation pyramid.
3) Trading is Gambling: Trading is not gambling and although a little influence of luck could be there, the profession of trading can be learned with the help of skills and competence. All successful traders put a lot of time effort and work to apprise themselves with the business market. These traders keep them updated from a variety of sources related to the domestic market as well as foreign exchange markets. The news related to the market can be found with the help of print and electronic media and for foreign exchange information, you can rely on some of the credible publications such as forex news feed. In a nutshell, to win and earn a handsome amount of return in the trading, you must update your knowledge and upgrade your skills continuously.
4) Indicators are useless: Indicators in trading occupy a special place. They help traders to make the right kind of decision and although it is a reality we should not depend upon a large number of indicators, banking upon a couple of indicators could prove very useful to us. All successful traders make very discreet use of indicators and you should also do the same if you want to remain in the trading for a long time.
5) Veterans don’t make mistakes: The business world is highly volatile and uncertain in nature and hence, it is quite natural that even top readers make some mistakes at certain points in time. It is wrong to assume that seasonal traders always know about the market accurately – veterans also sometimes fall prey to their sentiments while making the decisions. It is therefore contingent upon you that every decision taken by you as a trader must be based upon facts and figures rather than emotions.
There are some fundamentals that you need to take care which helps you to remain sustainable in the trading profession for the long-term. One of the primary aspects is to learn the skill of trading and keep on practicing it continuously. Once you stay put with the profession while ignoring the speculation of others about trading, you will learn the intricate art of trading which in turn will help you to become a successful trader eventually. The focus of your methodology to become a successful trader should be to concentrate on the facts and figures and try to learn every aspect of the market. You must have the information on which companies are performing well and more importantly which organizations have solid performance indicators. The companies which have got their basics right are ones you should stay invested as these organizations will help you to have a multiplier effect on your investment in the long term.