Myths are common in most fields, not just day trading, and the more they’re circulated, the more truthful they sound. Many people accept them as fact because they don’t know enough to dispute them, and others simply assume they’re true. In either case, these beliefs can have negative effects on someone’s trades. Below are several trading myths with potentially serious consequences.
One Kind of Strategy Works for Everyone
The idea that a complex strategy is always better than a simple one can’t be proven, as traders have seen success with both options. Every trader’s methods are slightly different, and new traders should keep an open mind during the learning phase. Above all, traders shouldn’t let this myth deter them from a strategy that’s providing good results.
Trading More (or Less) is Good (or Bad)
Traders should take the trade numbers dictated by their chosen strategies—no more, and no less. When someone says to “trade more” or “trade less”, that advice is typically baseless and given completely out of context. High-frequency traders may make several hundred trades per day, and they’re often profitable. Others may only trade once per day while turning a profit. As long as the current plan is working, the number of trades is irrelevant.
There’s a Holy Grail of Trading
As discussed in the sections above, there’s a lot of conflicting information out there. While some are against day trading because they believe it will only result in losses, that’s simply not true. While day trading isn’t easy, many people are successful enough at it to do it for a living. There’s no ‘secret code’ to the world’s markets, and when traders stop looking for it, they often become more consistent and successful. All a trader needs is a strategy that wins more often than not and is slightly profitable.
The Final Word
As the saying goes, there are two sides to every story. That means a new trader could end up going from one end of the spectrum to the other. Successful traders use various methods, and newbies shouldn’t assume there’s only one ‘right’ way to do things. By thinking of how these misconceptions can negatively affect performance, a trader can take steps to mitigate those harmful effects. Get more information sourced from here on Rockwell Trading’s website.