Stock Market Trading - Top 4 Trading Myths That Jeopardize Your Success - By: Peter Bosch

Do you believe buy & hold is safe? Or that selling short is risky? Read below the top 4 myths that are widely believed, and keeping people from their trading potential. When you properly understand these myths, you will be leaps ahead of everyone else.

Myth #1 Selling short is risky

This trading myth comes from the fact that some stocks can trade down to zero while there is no limit to how high that stock can trade. So losses for long positions are limited on the downside, but short positions can suffer unlimited losses.

But the belief that short selling is risky is preventing you from minimizing risk and preventing you making money. You see, selling short works just as well as buying long if done properly. The level of a positions risk depends on good money management methods.

A small percentage of traders have realized this and have developed a trading strategy to sell short and profit easily regardless of which way the stock market is moving.

Myth #2 Buying & holding is safe

This would have to be the most common trading myth, that stems from the belief that the stock market always goes up in the long run. This is true enough, but it can also take an extremely long time. Some markets have been known to drop dramatically, and not return for 25 years! Like the Dow Jones Industrial Average from 1929 to 1954.

It dropped so low during this time that no one would sit through it. Money managers who can duplicate the performance of the general market are very rare. You need an exit strategy that limits risk for every strategy, whether investor or trader.

A small percentage of traders are using a trading method that will actually apply to any market. This potentially gives them a winning edge. They aren't simply buying, holding, and hoping like most traders do.

Myth #3 Trading is easy

If making money consistently from the stock market was easy, everyone would be doing it, and all be wealthy from it. Yeah, the physical part is easy enough, but many people have this idea that trading is easy, but they were never given the tools that make it easy.

It's not that trading needs to be difficult, but it requires a solid trading method, and diligence on the traders part to stick with it. And unless you also trade with discipline and use good money management principals like the most successful traders, you can only hope to be less than successful.

Myth #4 The existence of the holy grail

I see far too many traders hopping from method to method, pursuing the next guaranteed thing only to be repeatedly let down. Newbies tend to think they should be able to win practically every trade. Thinking they should be having a straight line of wins without any major setbacks.

When armatures try something, they conclude that their system doesn't work after the first few losses in a row. So they jump on something else. How can anyone expect to succeed this way. Unless you want to continue to suffer losing trades, and eventually give up, stop chasing this holy grail nonsense.

The holy grail of trading doesn't exist. It would seem more than 90% of traders are wasting years of their life with this myth. Think of the progress, the money that could have been made, if they had spent that time and energy on a solid trading system, and a good trading method.

Where to go from here:

Well first, simply understand and clear your head of the above stock, and trading myths. Free yourself from these beliefs that restrain your potential as a trader. This will automatically put you in front of most traders.

There are a few traders however, less than 1%, who understand the above and more. who are quietly making a killing from the stock market, and are spending no more time trading than you. A lot of them keep their winning system and their successful trading secrets to themselves, but there are a few who will share this information with the public

Just remember, none of these super traders are born geniuses. And they don't have a crystal ball forecasting the stock market. They simply have found a winning system that isn't restricted to any time frame or market. The most successful traders are nobody special, apart from the stock market secrets they learned and diligence to put them in action.

Regardless of whether you trade stocks, options, futures or forex, or your level of experience, you can't afford to keep buying and hoping. Stop leaving your success to chance when you can take control. It isn't necessary to keep wasting all this time and money on the common trading methods. Even if you are ahead, the average trader could trade far more efficiently.

You too can become one of the very small percent of traders. Seriously, you just need to learn how to properly, plot the chart, the right setup conditions, the best entry point, stop loss point, and place your profit target point.

About the Author

To learn how to do the things listed above , and for actual insider trading secrets on how the most profitable traders really do it - Read on. Peter Bosch is a young article author who has experience in most internet related subjects.

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