The lure of fantastic profits has convinced a lot of people to learn how to trade stocks. Bear in mind though that it’s always easy to get caught up mainly in the glowing attraction of gaining financial freedom. This is perhaps one reason why some novice investors buy in on various myths. Before you start learning how to invest your money, you should first find out which beliefs you hold are mythical and therefore need to be corrected.
#1- People get rich fast on the stock market.
It is a fact that lots of investors earn thousands or even millions just trading stocks. They can earn this much in less than a year. It is not safe to say though that you will immediately become a millionaire once you learn stock trading. You have to exert a great deal of effort to be able to truly reach high profit goals. Keep in mind though that finishing a trading course with excellent grades is not an absolute assurance of future success. Even the cream of the crop can stumble on bad trades from time to time.
#2- You can be sure that there is a holy grail or a perfect guru.
Some beginners believe that there is a magic bullet or holy grail in the form of a strategy or person. They expect it to tell them exactly what to do and what to trade every single time so they always emerge as winners. The sad fact is that no one can help you learn to trade stocks perfectly. The market is unpredictable in a lot of respects and no one can determine with absolute accuracy what tomorrow will bring.
#3- It’s possible to always protect oneself from losses.
One basic fact that every trader should accept is the inevitability of loss. Even the best of the best cannot escape losing sometimes. It is therefore an absolute must to set one’s psychological state to expect some loss. What is critical to take note of though is the fact that losses are manageable. You can protect your capital from eroding completely and you can set the right stops to make sure you don’t lose more than you can bear. Once you learn stock trading from a reliable coach, you will understand the basics of risk management which is what you need to survive in trading.
#4- Technical skill is the most important factor to master.
Obviously, traders who are experts at technical analysis enjoy an advantage over others. Technical skill however is not the only factor that you need to become a top trader. Before you learn this aspect, make sure you already have the appropriate psychological state in place. One of the most significant factors that can determine win or loss potential is trading psychology. To enjoy fantastic gains, you need to develop the discipline that is the result of using a trading system.
Those who learn how to trade are closest to financial success. Be mindful though of mythical beliefs even before you take the time to learn. Getting your beliefs straight is essential to protecting you from losses.
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MLA Style Citation:
Mathews, Reece "Learn To Trade And Break The Myths." Learn To Trade And Break The Myths. 24 Jun. 2010. uberarticles.com. 28 Dec 2014 <http://uberarticles.com/finance/investments/learn-to-trade-and-break-the-myths/>.
APA Style Citation:
Mathews, R (2010, June 24). Learn To Trade And Break The Myths. Retrieved December 28, 2014, from http://uberarticles.com/finance/investments/learn-to-trade-and-break-the-myths/
Chicago Style Citation:
Mathews, Reece "Learn To Trade And Break The Myths" uberarticles.com. http://uberarticles.com/finance/investments/learn-to-trade-and-break-the-myths/
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