Learn how to distinguish truth from illusion that so often force investors

Ted Capwell

The development of the information sector and technologies has opened for private investors an amazing world of financial trading. At the moment, almost everyone can become a participant in trading in the currency or stock market, even such an innovative direction as trading crypto-currencies is open to any user. However, on this background of popularization, many do not profit, but lose money, and the reason lies in the plane of stereotypes and myths that private investors peck at when choosing the sphere of activity and trading tools. In our material, we decided to analyze the main myths of online trading, which are often imposed on users.

Learn how to distinguish truth from illusion

So, almost every potential player in the financial market with the question – how you became a trader, can answer that he learned about this area either from a fascinating thematic film or advertisement! Yes, strangely enough, these sources are the main means of attracting investors to trading platforms. And this is the main problem that forms the first and, perhaps, the main myth of trading in financial markets.

Myth # 1 – financial trading is very profitable and easy!

The first thing that a potential online trader encounters when acquainting with the financial market is advertising a specialized trading platform, in which the profitability and simplicity of this occupation are extolled in every way. Different success stories, in which they say how a simple guy or a girl has earned hundreds of thousands, and sometimes millions of dollars, just by trading on currency pairs. Of course, the ignorant philistine does not see in this the pitfalls, but only the possible end result in the form of huge profits and benefits that can be afforded by trading on Forex or platforms for over-the-counter fixed-term contracts. So, we completely debunk this illusion!

First, on our planet simply there are no simple directions of human activity, which would bring a huge increase in profits. Each job requires effort and special skills. Financial trading – this is mostly not trade in the truest sense of this concept. Financial trading is primarily a complex analysis of quotations and the determination of possible market movements in a particular situation. To become a professional in this matter, it is not enough to read thematic articles or study several textbooks on trading. It is impossible to become a successful trader without professional training and practical skills in working with finance. Yes, you can meet many investors with good results, which are self-taught, but this is rather an exception to the general mass. Analyzing the statistics of the main platforms for financial trading, you can clearly say that only 10% of all users were able to profit from trading in financial assets. The rest of the mass of investors have lost their money or belong to the cohort that only seek to take their place in this field.

Secondly, even large investors and financial funds with a huge army of analysts do not get crazy profit indicators here. In general, any institutional investor or investment bank with a worldwide reputation can not boast a profit above the level of 5% per year! Yes, imagine that the most advanced specialists and professional traders can not receive more than 5% of revenues per year! Given the volume of their working capital, a fairly large amount is obtained, and what to do with a private investor with a minimum investment capital is to be content with copecks.

Third, in order for a trader’s investment account to grow steadily, a trade participant should receive on average more than 60% of profitable trading positions – and this when working with futures contracts with clear indicators of profitability and loss. When trading Forex, the calculation of risks and profitability indicators has an even more complicated algorithm. For this reason, in the field of financial trading, it is often referred to as a “Negative expectation” of generating income. The fact is that the risks of loss of funds or the difference between the level of profitability and loss of trade position initially set a certain level of losses in trading which, if the strategy of actions is wrong or investors fail, leads to the complete destruction of investment capital.

Given these factors and the technical difficulties that accompany online trading, it is impossible to call trading in the financial market a simple occupation. We pass to the second error.

Myth # 2 – invest 10 dollars and earn a million!

The second and most common misconception that is very actively imposed on investors is the opportunity to receive a large income with minimal investment of funds! Yes, marketers in this case tried to glory! The bulk of companies providing financial services for online trading offer potential investors to start their operations on a minimum account. Conceived is from 10-20 $ of initial investments. A perfectly acceptable amount for any active person. But the problem is not this – luring customers, companies say that such a volume of funds gives the full range of opportunities to maximize profits! This is certainly confirmed by the success stories of traders working on the company’s platform and bright clips with millionaires! Only a few people in this advertising madness say that with such investments to earn even $ 1000 is almost impossible! We have already touched on the issue of trading profitability in the financial markets, we will expand the analysis of this indicator a little. So, the average indicator of the profitability of an online trader with excellent skills and experience in trade is no more than 20% per year! When investing $ 10 of initial investment, you will get a $ 2 increase at the very best. About millions do not even come! Therefore, considering trade as the main mode of income generation, be prepared for large initial investments.

The latter fact led to the appearance in online trading of such a derivative of hedge funds as PAMM-accounts. This is a collective investment managed by a professional trader, and the profit is divided among all participants in the projection by the amount of investments. Only in this issue there are several problems:

– The PAMM account manager does not bear any responsibility to investors for their actions, which can lead to loss of capital of all participants of the account. Therefore, today this type of activity is considered by many experienced investors as negative
– PAMM accounts were actively used by fraudsters to deceive users, which further damaged the reputation of this trading regime
– And, of course, the level of profitability of this type of investment is minimal for each financial player participating in collective investment

Thus, the myth of the amazing profitability of financial trading has nothing to do with reality.

Myth # 3 – Online trading – divorce!

In contrast to marketers who promote online trading of financial assets on the network, there are a lot of skeptics and outspoken opponents of this field. These users categorically declare that trading in the network is one of the biggest fraudulent schemes. It should be noted right away that most of these citizens are traders who have failed in this field and left the market. Therefore, when analyzing this myth, it is necessary to be skeptical of such statements.

The problem in this issue certainly exists, and it consists in a huge number of scammers, who, copying the activities of large trading platforms, deceive traders and trite the investors’ funds. It was this that caused great reputational harm, the consequences of which we can now observe in the network. However, trading can not be called fraud! Cooperating with a licensed company, trading in efficient trading systems, being a professional in the analysis of quotations, you can make a profit!

In order not to fall into the clutches of swindlers, there are a number of simple and logical recommendations that, by the way, allow not only to save their investments, but also open the opportunity to significantly increase the effectiveness of their trade:

› Carefully choose a trading platform
› Use only licensed companies in your country
› When choosing a terminal, study the responses of traders and specialized ratings
› Do not mess with services that impose unnecessary services and tools on you, especially be careful with PAMM accounts and personal analysts
› Continually analyze your actions in the market and financial services of a trading partner company

In this simple way, you avoid troubles and financial losses when trading on financial assets.

Myth # 4 – Do you trade on global exchanges?

We came to the direct technique of trading on online platforms, which is now offered to private investors. The bulk of novice traders is imposed such a delusion: having issued a trading position in the market, and no matter what tool, it draws up a contract on the world exchange platform, that is, becomes a participant in the global financial system! Gentlemen, do not believe it! In our region, companies do not work, which enable them to conduct real exchange transactions in the financial market – this is possible only on the services of American and European companies that provide financial services for online trading. And in this respect, jurisdiction is very important. In addition, for real financial transactions in the market will require large capital – at least $ 10,000. By these means, few people can take a chance today, they agree!

The second point is that all traders in the derivatives market, Forex and other online trading formats work only on their trading services and their positions are not listed anywhere. Simply put, you work against a company you work with or other players like you. At the initial stage of the advent of online trading – it was a problem. The fact is that the client base of the companies was minimal, and bankruptcies were often observed here, which led to a loss of funds by investors. Today, online trade is so global and has become so widespread that over-the-counter contracts and a variety of derivatives from classic trading instruments are often called alternative exchange trades. Today, professionals no longer call the problem work on a particular service, the main thing is that the partner company is licensed, and therefore safe!

Myth # 5 – The existence of the Grail!

Against the backdrop of the popularization of online trading, many “experts” began to appear, who actively began to promote their own trading strategies or robots and bots in the analysis of the market and trade. And of course each of them speaks of their system as the Grail of financial trading. Here you can often find statements about a 100% efficiency strategy or a robot that does not open unprofitable contracts. This is primarily aimed at beginners and non-professionals with minimal experience in trade. Every more or less advanced trader knows that the existence of a Graal strategy is impossible for many reasons. Here it is necessary to talk about both the purely technical complexities of trade and market analysis, and the psychological factors of working in the market. If you can not figure it out for yourself, study the work of the recognized trading guru B. Williams “Trading chaos”, which clearly describes the investor’s possibilities in terms of performing effective analysis and forecasting market movements.

Choosing a trading system, you should pay attention not to how the author praises her, but on specific technical indicators:

› Asset type for evaluation
› Trading time
› Trading tool
› Market evaluation period
› Duration of the forecast
› Risk indicators

And of course, independently evaluate the effectiveness of the proposed system by testing, only so you can find for yourself the best format for working in the market. But in any case, remember, there are no strategies with an efficiency level of 100%!


A beginner of financial online trading in order to achieve success requires an extremely large preparatory work. Here, every aspect of working in the market is very important. But the main thing is training and choosing a professional partner for work. Studying the myths and marketing misconceptions that the network imposes on you, you discover for yourself the opportunity to make a right and professional start in the market, which means you will necessarily become a successful investor.


“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”