The world of trading today is not only challenging but can also be confusing. Many people have taken the opportunity locked up in trading business online to become financially free till their old age, however, it is surprising to know that different myths and misconceptions also about in the industry, and many of them have been around for ages.
Whether you are already involved in online trading or just thinking about it, here are some online trading myths you need to stop believing.
Online Trading Myths That Aren’t True
#1: Trading is gambling
Well, that seems to be the first myth you need to stop believing right away. This is a common misconception among people considering trading business online. Online trading is not gambling. It is a venture that requires you to be dedicated and grow through constant practice.
It involves taking risks, which is the reason you are being rewarded in the first place. But these risks can be greatly minimized through making your own research, diversification, and following stop-loss rules. All of these don’t happen with gambling. So online trading is not gambling at all.
#2: Online trading is for professionals
Although this has been true some decades ago before the invention of online retail trading platforms. But that is no longer the case today. Trading options have always been available to investors but the unavailability of supporting technology has limited their use. Now that we have a variety of online trading platforms where anyone can invest and make a good profit, trading business online has become something that is available to all regardless of your experience level.
#3: You have more profits through higher leverage
This is not always the truth. Higher leverage could mean higher profits only if you are lucky to have the market turn in your favor. But it doesn’t happen that way, you should be expecting a huge loss on high leverages.
So, you can say leverage is a double-edged sword designed to bring hurt to traders without them knowing it. So instead of concentrating on getting high leverages to double your earning, we recommend you take your time to pick the best company that is fundamentally strong and make yourself happy.
#4: To trade stocks, you need to be rich
This has been the belief of many people for several years. They believe that trading stocks require a lot of money and it’s only the rich that can be part of that club. But that is just a myth you need to stop believing. Trading business online has now become easier as you can now research stocks and invest in them whenever you want.
#5: When you make a trade online, you completely bypass the brokerage firm
This again is a myth you need to stop believing. All trades require you to involve a brokerage firm. Although you may make some investments online through various trading apps or a firm’s website, you will still need a brokerage firm to help you execute your trades.
#6: Trading without a stop is better
The truth is that trading without a stop could be wrong in many instances. Think about it. Trading without a stop loss means trading with so much risk. You will have little or no control over your position size, you won’t be able to perform solid risk management, and it could put you in the jeopardy of losing your trading account on one single trade. All these are enough reasons to prove to anyone that trading without a stop loss is not advisable and should be avoided.
#7: What goes down will surely come up again
Well, that is not always the case. Markets can remain irrational longer than you expected. It is not recommended that you make trades with the assumption that the market will rebound after a crash. That may leave you stranded and waiting for so long, and that could frustrate you. Though markets rebound after a crash, it usually takes months before that happens.
Conclusion about Trading Business Online
These are the common myths about trading business online, and you should stop believing them right away. Knowing that they are actually myths will help you enter the market and start trading in such a way that you attract nothing but a series of wins.
