Day trading has become a popular vehicle for (attempting to) create or maintain wealth. Every single day, thousands of new Day Traders emerge from the sidelines, primed and ready for action. They eagerly seek to learn day trading success strategies used by the Master Traders.
However, when a new or a struggling day trader begins to investigate and explore the world of Trading, in an effort to make their own dramatic entrance or to improve on their results, they are confronted by a world full of seemingly insurmountable challenges and obstacles.
But these new and/or struggling Traders don’t realize that MOST of these obstacles are myths.
And because they fail to recognize this, these new or struggling Traders typically fall prey to one of the 5 Great Myths of Trading:
1. Day Trading always requires massive capital accounts, both to learn, and then to execute a Day Trading Strategy.
It is true that in many cases you do need massive capital up front in order to step into the Trading arena, depending on where you learn trading, and what investment vehicle you choose to trade. But it certainly doesn’t HAVE to be.
In fact, it’s possible to secure an excellent Trading education AND fund a trading account with as little as $3000.
This is a little known fact among newbie Traders – they assume they’ll need to have at least $25,000 to open a trading account, on top of the $10,000+ they paid an “expert” to learn a trading system.
2. Day Trading always requires countless hours spent chained to your computer, staring at stock charts.
The stereotype of a Day Trader is someone who spends ALL DAY LONG glued to their computer screens, staring at stock charts, waiting for indicators to tell them its time to make a move.
And in large part, this stereotype is justified, because this is true of most Traders. These Day Traders will literally spend HOURS, if not ALL DAY LONG at their computers trading.
They use Trading as a means to escape the corporate rat race… only to find themselves in a J-O-B of their own creation.
But it doesn’t have to be this way. In fact, it is entirely possible to be an incredibly efficient and successful Trader while trading for just a few minutes a day – if you know how.
3. It takes months (or even longer) to learn and fully grasp a “successful” day trading strategy
Like the other myths, this one CAN be true, and IS true of many (most?) traders. The reason for this is most traders use technical trading systems and strategies.
The primary problem with these technically strategies is actually the topic of Myth #4 (to follow) – but suffice it to say that technical trading systems will take months to learn, and involved hundreds if not THOUSANDS of “practice trades” before you can possibly be ready to start trading “live” (i.e. with real money).
And when you DO go “live”, that doesn’t mean that you’ve fully grasped the trading strategy. In fact, it will be months or even years after going “live” before you likely have a firm handle on your technical trading strategy or system.
But like the other Great Trading Myths, it doesn’t HAVE to be this way.
In fact, it is possible to learn certain trading strategies and be ready to successfully implement them in a matter of weeks, or even DAYS.
If you know what these ultra-efficient strategies are, and where to find them.
4. You need a PhD in Advanced Statistical Theory in order to trade successfully.
This myth is a little bit “tongue in cheek”, but you no doubt understand the concept here. Many day traders typically employ a Technical trading style, which involved the use of statistical probability formulas and other highly complex technical indicators.
New traders see the level of complexity often involved with technical trading or “trend trading”, and are so intimidated by it that it keeps them from ever trying learn day trading.
Also, most people who try to learn technical analysis will struggle and eventually fail, because it IS so complex, and the technical indicators can often be very ambiguous.
The extreme complexity of technical trading systems may be the single biggest factor that prevents new traders from entering the Trading Arena.
5. You don’t need to learn how to trade from a professional – you can just teach yourself.
Of all of the 5 Great Trading Myths, this one runs the most rampant, and is responsible for destroying the overwhelming majority of trading accounts.
If there is one thing that new Traders need to understand, and that struggling or failed Traders understand all to well, it’s this:
You are going to have to pay for your trading education, one way or another. You can either pay to learn how to trade from a Professional, OR you can pay the Market.
And the market is a much more cruel, and a much more expensive instructor than nearly any Trading professional that will teach you how to trade.
Those Traders who want to try to “figure out how to trade” all on their own, with maybe the help of a book or two, will quickly discover that this is absolutely true.
The Market loves to dine on the trading accounts of inexperienced and uneducated day traders. Don’t let YOUR trading account become an afternoon snack for the Market.
When you are finally ready to learn day trading, explore the various options available to you before settling on any specific day trading system or strategy.