Like any relatively new activity and not without risk, trading is surrounded by a large number of myths. Some of them may have a certain credibility, but most of them are outright false. We invite you to know which are the myths of trading so you can have an accurate opinion about this activity and solve your doubts about how to start trading.
1. It is a way to make easy money
Obviously, those who dedicate part of all their time to invest in the stock market do it to obtain economic benefit. But it is not convenient to confuse the desire to earn money, something lawful in any activity, with thinking that it is something simple. Those who trade do so not only to recover their investment with profits, but also because they like to study the markets, watch their fluctuations and take advantage of the right moment to trade.
It is a mistake to think that trading is going to solve your life or make you rich very quickly. If your thinking is that, you’d better look for another activity.
2. Learning to trade does not require effort
This is probably one of the most widespread trading myths. They have become very fashionable quick courses that promise profits in a very short time, without hardly teaching you investment strategies or technical analysis. This goes against the premises of any trader. To begin with, because get rich quick is not part of any objective, remember that if you want to enter any trading platform to get short term income, you are going to get the opposite.
But, in addition, learning how to perform financial operations takes a lot of time.
It is an activity in which you are constantly learning and which depends on a large number of external factors. These are beyond the control of even the most experienced investors.
When trading financial instruments, it is not only a large number of financial parameters and intercompany transactions that have to be taken into account. Any movement on the geopolitical level automatically has an impact on the markets. We have recent examples with the Ukrainian conflict. Do you remember the unexpected event of the 9/11 attacks? They had a very negative immediate impact on all the world’s stock markets, and no one was able to foresee it.
You have to know a lot and in quite a few fields to be able to carry out a stock market operation with a certain degree of certainty. But this should not be a discouragement for those who begin, but a stimulus to start a solid career as an investor. It is hard to understand a trader who does not keep abreast of current affairs and who is not soaked in information from many different fields on a daily basis. All of them influence the markets.
3. There are trading strategies that never fail
This is one of the most widespread false myths about trading. There is never a perfect strategy, and this axiom is a consequence of the two previous points. Markets are in continuous movement, so trading stocks that, a priori, may seem safe, at any time can turn around and become a risky strategy. False trading gurus are those who proclaim that A+B=C, when it does not have to be so. The best strategies are those that you can begin to master and that work for you at a particular time.
Never close your mind to any kind of possibility, as learning must always be a constant in any investor’s career.
I can invest from anywhere
It is true that any online broker has a mobile application that makes trading much easier. But that does not mean that you should practice this activity anywhere and under any circumstances. You should never lose the north, operating in the financial markets requires concentration, study and analysis. Something that should not be done in the subway, from a bar or with your children hovering around. To trade with more guarantees, take your time, make sure you are calm and try to be concentrated, this way you will increase the possibility of launching winning operations.
The best way to start is to use a DEMO account, since these accounts allow us to make operations without using real money, so we can put into practice our strategies and we can learn with all the security. A broker that offers you a great simulator account is NAGAwhich offers you the possibility to trade forex, stocks, indices and cryptocurrencies, with a DEMO account of $10,000,
5. If I cover more, the better it is for me.
It is never a good idea to try to operate in different markets or with very diverse securities. With this we want to convey that the best thing to do is to specialize in something specific and work on it. Regardless of whether it is currencies (forex market), cryptocurrencies or commodities, it is always better to draw a roadmap on one of these areas than to try to cover a lot. The reason is very simple, if you specialize in something specific you will have a much greater knowledge about it and, therefore, the chances of error will be lower.
6. I need a lot of money to get started
No, in fact, this is not desirable. If your knowledge about trading is very limited or you are a novice, it is best to start with small amounts and see what trading is all about. It is also highly recommended to use the demo accounts of the platforms. This is a learning place where you trade with real data, but with fictitious money. This way you are not risking your assets. When you have gained enough experience and know how a particular market works, you can start making the leap with real money, never in large amounts. So to the question “How much money do I need to start trading,” the answer is as much as you can afford to lose without it being a problem.
7. Trading and casinos are the same thing.
If you go with this mentality is that you are thinking that everything happens by chance, but day traders know that it is not.
This is a feeling that people who do not know this type of activity and think that it is all about luck. We will not tire of repeating that day trading involves a lot of effort and hours of study and dedication. Therefore, with the exception of very unexpected events, nothing is left to luck. It is always advisable to separate the image of the day trader from that of a person who has a stroke of luck and collects profits.
These are 7 of the most widespread myths about trading. Surely you have heard of them, as they keep repeating continuously, but it is convenient to start clearing the way of false ideas that give a very blurred image of the reality of trading.
To put all your knowledge into practice, we recommend you to open a DEMO account with NAGA that will allow you to have a DEMO account with $10,000 to make the trades you need without using real money. In addition, you will be able to discover the great benefits of Social Trading, and earn money while helping others to earn it.