*OspreyFX would like to state that traders should research extensively before following any information given hereby. Please read our Risk Disclosure for more information.
True or False: 10 Common Trading Myths Pt. II:
The trading world is often seen as a cryptic hub that is shrouded in mystery and mystery creates the perfect conditions for myths. However, this could not be farther away from the truth. Trading is in fact grounded in logic and rationality is effectively the name of the game. That’s why we’ve already dispelled 10 common trading myths and today we’re debunking another 10.
Subscribe to our newsletter to receive our weekly updates + more straight to your inbox!
1) You can’t be a good trader if you’re a part-time trader
This is false.
It is completely possible to be a successful trader if you have a regular 9 to 5 job. The crypto market never closes while the forex market is open 24 a day from 17:00 EST on Sunday to 16:00 EST on Friday. This flexibility means that you can think of trading as a secondary source of income alongside your full-time job. In fact, trading on the side (even if this is for the initial part of your trading journey) means that you are not placing all your eggs in one basket.
2) Trading is just like gambling
This is definitely false.
Many might think that gambling and trading are similar because both include an element of luck and risk. However, trading is not like gambling at all. In a gambling scenario, players place a sum of money on a particular outcome and hope that they get it right. Conversely, traders make calculated moves based on facts and strategies to create the desired outcome.
3) Top traders know best
This is not true.
While there is a lot that one can learn from the experiences of a trading extraordinaire (click here for some truly inspirational stories) it is important to keep in mind that no one has walked a mile in your [trading] shoes. So, learn from the crème de la crème and keep in mind valuable pearls of wisdom; but never let these become a replacement for your sense of judgement, goals and trading plan.
4) Crypto money is not real money
This is unequivocally wrong.
Cryptocurrencies are as real as the banknotes in your wallet or the capital in your bank account. They have a value in the real world and this is only proven by the fact that cryptocurrencies are increasingly becoming an even more accepted form of payment.
5) You need a lot of money to succeed
This is technically false.
In our first instalment we have explained that starting small is unlikely to result in an overnight success. On the opposite end of the scale, it is equally important to debunk the myth that large sums of money are required to succeed. When it comes to forex trading, leveraging helps you to make the most of your resources. In a nutshell, leveraging can be described as a type of loan that traders use to maximize their results. So, while your actual capital may be relatively limited, leveraging still enables you to think big.
OspreyFX offers a 1:500 leverage which means that for every dollar our traders put in, they are able to use 500 for their trades.
6) You need a solid academic background
This is completely false.
It is true that there was a time when trading (especially of the stock market variety) was intrinsically associated with tie-wearing traders in a few major cities. This is no longer the case. Apart from the fact that access to the markets is available online, you can learn all about trading from the comfort of your own living room. The amount of reliable learning resources that are available is nowadays is truly astounding. So, the only limiting factor is how determined you are to learn more about trading.
7) Crypto trading is difficult
This is definitely incorrect.
Just like trading is no longer the preserve of tie-wearing traders, crypto trading is not only the preserve of crypto wunderkinds.
The crypto world is still its inception. It is constantly expanding and evolving so everyone is essentially still learning more. So, don’t be too hard on yourself and instead shift your focus on gaining as much knowledge as you possibly can.
8) A trustworthy broker gives you that extra edge
This is true.
A reliable broker can help you to navigate the ins and outs of the trading world while giving you access to tools, technologies and resources that you wouldn’t have access to otherwise.
What’s more if you choose a broker with 24/7 support like OspreyFX, you have access to assistance anytime you choose to trade.
9) The total number of bitcoin will never exceed 21 million
This is true.
Bitcoin creator Satoshi Nakamoto designed the bitcoin ecosystem to contain a maximum of 21 million coins. While we may never really know why this specific figure is chosen, we do know that the finite amount of coins ensures that inflation is kept under control. Check out our bitcoin halving duo here and here if you’d like to know more about the process behind the coin.
10) Cryptocurrencies are used only for shady transactions
This is not true.
There is the common misconception that cryptocurrencies are primarily used for illegal purchases. However, this is not the case. In fact, statistics show that cryptocurrencies are mainly used for the purchase of much more mundane items, that is, food (38%) and clothes (34%).
Knowledge is power. The more information you have and the more experience you gain, the better equipped you are to look at trading myths objectively. At the end of the day, no two trading journeys are created equal.
So, trust yourself that you are on the right path without worrying too much about what some of the trading myths may be saying