Did you know the average casino goer is less at risk than the average person trading online?
Studies have shown that casino game are set up to contain losses better than the average trader’s plan.
That’s scary stuff.
With such daunting prospects, you would expect aspiring traders to be better prepared. The truth is most are not ready before stepping onto the battlefield that is trading online. Many are not trained and ready when they first hit the buy and sell keys.
Disaster ensued immediately. Or they set up a financial time bomb because at first sheer luck rewards them for doing the wrong thing. Either way, it’s not a pretty picture.
I don’t want your story in the markets to end this way. So below you will find 5 lies about trading online. Sidestepping these treacherous traps will put you on the right path to the success you seek.
Trading Online – Lie #1: The ultra lux lifestyle will just fall in your lap
For most people, the first draw to trading online is the money and the lifestyle.
The sales game is to entice traders with the proverbial carrot. Sleek sports cars, marvelous mega-yachts, and hot humans are prevalent in trading advertising. Moreover, all those material things are an attempt to entice you to a whole new world of risk and reward in trading.
Unfortunately, this marketing to traders obscures the truth. These nice things are the trappings of any type of success. They apply to sports stars, actors, or business people who have lots of money.
As in those professions, what someone buys with their earnings has nothing to do with how they earned it.
The marketing message mixes the trapping of success with the path to success itself. This is deadly.
What you need is a simple way to separate process from reward. A great way to do this is to soul search your way to discovering whether you actually like trading.
Ask yourself if you like trading for what it is or whether you want the material outcomes. Remind yourself that these are achievable with money made elsewhere. Get into trading for trading sake.
Trading Online – Lie #2: You need a tonne of money to start out
There is a pervasive myth in trading that you need a lot of money to start out.
Yes, you do need money to make money. Luckily it could be less than you expect.
Whether you’re starting with a small stake or you are a recent lottery winner, you can have success. It’s more important to be well planned and prepared that it is to start with a large account size.
“Starting small is fine. You can grow your account as you grow as a trader.”
An empowering mindset is to understand the possibilities. Start with investing in yourself and raise your trading skills.
Once you can generate steady return, there are many ways to apply your edge to the market in a bigger way. And that will result in more money into your account.
Trading Online – Lie #3: You need a unique edge that no one else knows
Every trader needs an edge to succeed.
The search for an edge is one of the most challenging yet essential things a trader must do.
It may not be the simplest task but it’s also nowhere near as difficult as many traders make it. That difficulty amplifies when a trader has some need or desire to want that edge to be unique.
In effective trading, there is not much that is new. Recognize that it takes effort and persistence.
The playbooks for success are out there. Reinventing the wheel, or coming up with your unique version, only does one thing. It delays your meeting with the success you want.
So emulate the tried, tested and true habits, trading styles and strategies out there. You will get further, and you will get there faster.
Once you are profitable and getting the results that you want, then you can add your personal flair. Even then, making your edge unique is only an option.
Trading Online – Lie #4: You have to quit your day job right away
Many believe that you have to quit your day job to be great at online trading. This comes from the idea that all traders want to leave their day job once they hit success.
It’s a lie.
Plenty of traders learn how to trade and continue to succeed only trading part time. There are even traders who rarely spend over 30 minutes at the screens on any given trading day.
Moreover, who ever said that everyone wants to quit their day job? You may love your job and have a keen interest in trading on the side for the intellectual challenge.
Don’t feel like you have to devote all your time to trading for it to be a success. Some enjoy trading full time, but many have full careers and trade on the side.
“Trading on the side of another job can be a winning combination.”
There is an elegant solution if you want to trade while holding down another job.
It is to learn strategies that accommodate the time you have to trade. If you have a couple of hours a day to spend trading, find an effective strategy that requires a couple of hours a day. If you only have 30 minutes, find a strategy that only takes that long.
Trading Online – Lie #5: Having a business background is a huge edge
A pervasive lie in trading is that those who have business degrees have the advantage.
What does getting an academic degree in nutrition have to do with running a fantastic restaurant?
The answer to this question draws a parallel. A business degree may help prepare you in some ways for trading. Understanding nutrition may help you run a better restaurant.
But it isn’t enough of an advantage to worry if you don’t have it.
Understand that online trading is a unique and specific skill set. It isn’t covered by a general business background or education.
Even related areas of trading are often too different to be much help to an online trader. Skills from successful pit or institutional trading often do not translate well.
What you need for outstanding online trading results is strategy, practice, and persistence. The strategy part is something that you can go and find. Reinvention wastes time as you learned in Lie #3 above.
Practice and persistence have to come from you. Do you see how economics and business backgrounds are absent in that equation? If you have one that’s great, but there is no need for a business background for online trading success.
For more day trading techniques, tools & strategies, check out these articles:
- 10 Mind Mastery Methods To Hack Your Trading Psychology
- 7 Essential Techniques For Pre-Market Trading
- 11 Reasons You Need To Keep A Trading Journal
Avoid these five pervasive lies when trading online and you will be ahead of the game. Knowing what to avoid can be every bit as powerful as knowing what to do.
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