Like with many things in society, the picture painted by social media of what trading is doesn’t even come close to the reality of it. Here are three of the most common myths I see and some advice for you to avoid them.
1. Trading is all about big moves
Trading is not about completing a hail mary or hitting a 500 foot home run. It all comes down to value. If you want to be consistently profitable, stop looking for potential huge moves that aren’t likely to happen. You’ll have a lot more success picking your spots and looking for sneaky pivots.
Which is better… a 90% win rate with mostly average moves, or a 20% win rate going after only big moves? That answer should be obvious. Spending all your time and emotions searching for breakouts and then hoping and praying that they work out is a really good way to cut your trading career short.
2. Trading is easy and you’re going to be rich
I hear this all the time. Just looking at social media, you’d think the streets are paved with gold for traders. Of course, the reality is 90% of people lose money trading. I stress it all the time because that’s what most traders on social media aren’t saying. Preaching about education and realistic expectations just doesn’t get the same kinds of likes and followers as spinning a sexy story about how rich you can get from trading.
Profitability and longevity only happen for traders who have a solid process, good emotional awareness, and smart money management skills. Life is not fair and trading isn’t either. If you don’t have the foundation to understand when to push and when to scale back, you’ll quickly find yourself on the wrong side of the proverbial revolving door.
3. Hard work equals success
People love to say that if you work hard enough you’re guaranteed success. Trading is the only business in the world for which that simply is not true. If you don’t have the necessary skillset, hard work and dedication won’t get you anywhere. It’s all about understanding the markets and knowing when to apply your strategy.
Avoid falling for the myths
The best way to not fall victim to these prevalent myths is to take a step back. Slow down. Forget about what the market is doing. Spend some time figuring out what your strategy is and what type of trader you’re most confident being.
Get your foundation rock solid. Make sure that your trading on your time from a position of strength. And for new traders, one of the best tips I can give is to just get rid of your expectations. Every single day when I power on my monitor I have zero expectations for the next 8 hours. As a result – no matter how my day goes – I’m never going to be burdened by big disappointment.
When you eliminate your expectations, you can keep your emotions in check and your mind clear.
For those of you who like to learn from video content, we have a Youtube channel full of free content for you to check out. And for new traders who are lacking a solid foundation and a profitable process, click the button at the bottom of this post to learn how you can get an education in the PS60Theory from yours truly.