forex trading

5 Myths about being a trader

Daksh Murkute | | |

There’s a saying that trading is the easiest way to earn difficult money and because of this, there are many myths about being a trader.

 

Many people think that being a trader is easy and that traders live a very comfortable life but is that really so?

 

In this blog post, I’m going to bust some myths about being a trader. So stick around till the end as I’m going to talk about the top 5 myths that just aren’t true.

Contents

 

 

The life of traders isn’t easy. With trading, comes stress and pressure that requires traders to be at their best always. Here are some myths about the lives of traders that just don’t do justice at all to all the hard work that’s put in.

 

 

Easy money

 

5 Myths about being a trader - Easy money

 

Trading seems easy, right? All that we traders do is look at the charts, do our magic, click some keys on the keyboard, and boom, we earn money all while sitting by a beach sipping martinis.

 

But is trading actually this easy as it seems? Are all traders born with the skill that Nancy Pelosi has and that we earn money without doing much hard work? Well, not really. Trading is actually very difficult, to be honest.

 

To start out, we traders first have to develop a good strategy, then we have to learn to manage risk properly, then we need to train our minds to be in perfect shape at all times.

 

Even after doing all this, we might not make it and we have to again put in all the time to backtest and develop a new strategy.

 

All of this might seem like easy talk, but in reality, it takes a lot of time spent watching screens, journaling, and whatnot.

 

So the next time you see a trader sitting in front of multiple screens then go up to them and appreciate them for all the hard work.

 

 

Lots of money

 

5 Myths about being a trader - Lots of money

 

You might have watched the movie Wolf of Wall Street and might think that traders earn so much that we are all living the best life with all the luxuries around us.

 

Sorry to break this to you but no, we traders live a pretty normal life.

 

You need to understand that trading is not something where you get in and come out as a millionaire within a couple of weeks. It instead is a very good way to build wealth over a long period of time.

 

See it this way, you’re trading with a capital of say $100,000 which in itself is a huge capital. To live a really luxurious life you’ll need to earn say $300,000 which is 300% of your capital.

 

For this, you’ll need to profit 25% to 30% monthly and that’s just ludicrous.

 

You won’t believe it but the best of traders target 5% a month and they try to achieve this month on month, year on year, and in the end, they have built some serious wealth for themselves.

 

This is the reality of trading. It is a lot of money, but that money is made over a long period of time and not within a short period of time.

 

 

Insanely smart

 

5 Myths about being a trader - Insanely smart

 

The beauty of trading is that anyone can do it. Whether you are young or old or even if you have some education or not, anyone can trade.

 

Traders aren’t necessarily smart. Even though the definition of smart is subjective but I can pretty much say that even if you didn’t really do great at school, you still have a chance of becoming a good trader.

 

Well, not every trader is a math wizard like Jim Simons but they certainly are smarter than a lot of people out there.

 

It isn’t even about smartness in trading by the way. There are lots of other factors that play a role in one’s trading journey and trust me when I tell you this again, it’s a myth that traders have to be insanely smart.

 

 

Secret strategy

 

5 Myths about being a trader - Secret strategy

 

The trading strategy, a very lethal weapon of a trader, is something that fetches them all the money. But is it really some secret strategy?

 

There are thousands of traders but there are only a handful of strategies in comparison to that. So if a trader trades a strategy, then it’s highly possible that someone else also trades with that strategy.

 

There’s nothing like a secret strategy. Even the strategies that RenTec uses are known to us.

 

So what makes the difference? The difference is that each trader personalizes a strategy according to their personality, characteristics, and requirements. And that is a very important thing in trading.

 

Now I might trade a divergence strategy and I might make some tweaks in it to make it work for me, it might not necessarily work for you.

 

But you can use the same concept of divergence, make your own unique rules and it’ll work just fine for you. So it’s not really a secret strategy but rather it’s some unique set of rules.

 

 

Gamblers

 

5 Myths about being a trader - Gamblers

 

This is literally the biggest myth about traders and it’s the worst one too.

 

Yes, there is a thin line that separates gambling from trading but that thin line is what makes the difference and sets us, traders, apart.

 

If you see someone YOLOing their money GameStop stocks or cryptos then yes, that’s gambling and those people are pure gamblers.

 

But there’s a large group of people out there that actually trade smartly by carrying out legitimate analysis and managing risk properly so that they can earn consistent income over a period of time.

 

This is what real trading is and that’s what separates it from gambling.

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