If you search for trading online, you'll see people in Lamborghinis with Rolex watches trading from beaches making thousands of dollars a day with a laptop. But the real truth is most of what you see about trading online is completely wrong. In this video, I'm going to show you the seven biggest lies about trading that trap beginners.
And once you understand these, you'll see trading in a completely different way and hopefully won't be a victim to any of these scams. My goal is for you to make money and keep money and grow money, not to blow it and lose it on these stupid things. So lie number one is trading is easy money.
That's what people believe. They believe trading is a shortcut to wealth. Anyone can do it quickly.
Just learn a strategy and print money. And the reason why people believe that is because social media influencers are influential. You've got influencers all over social media trying to get you into a course or sell you something and all you're seeing is the highlight reels of their winning trades.
In actual fact, what they've got is three or four accounts set up and they're placing opposite trades. So, they'll take a buy on one, a sell on the other, a buy on one and a sell on the other. And then one of those will work and they'll just delete the other ones and show you the one that worked.
And that is legitimately a winning account, but it's not the whole picture. The reality is trading is a professional skill. So, it requires discipline, risk management, psychological control, experience, and everything in my last video, which you can go and watch here.
Learning trading is like becoming a pilot or becoming a surgeon or becoming a professional athlete. You don't master it in 2 weeks. It's going to take you at least 6 to 18 months just to learn.
Lie number two is you just need the right indicator. What people believe around this is if they find the perfect indicator, they'll become profitable. And the reason why people believe this is because thousands of indicators exist in the marketplace.
Everyone utilizes one in their own secret way and they want to kind of protect and shine the light on the value of that particular one. But in reality, indicators are just calculations based on price and they're all lagging. They're tools, not strategies.
Professional traders focus on market structure, price action, and probability. Indicators lag price. And although they can be great used as confluence, they can't be used to take trades on their own.
Lie three is you need a high win rate, right? So what people believe is winning 80 to 90% of the trades means that success when in reality trading profitability depends on risk versus reward. For example, you risk £100 or £100 and you win £300.
And even with a 40% win rate, you can be profitable. Yes, if you're a 50% trader and you're right 50% of the time and you're only taking one to one reward to risk profile, you're going to lose over time because you're paying spreads and stuff on top of that, but if you know what you're looking for, you definitely definitely don't need to have a high strike rate or be right all the time or have some ridiculously no loss system. In fact, if you're looking for that forever, you'll end up being paralyzed to taking any trades and you won't have any opportunities.
Lie number four is more trades equals more money. And what people believe is the more you trade, the more you earn. When in reality, overtrading is one of the biggest reasons traders fail.
They're in trades they shouldn't be in. Professional traders are extremely selective and strict with their rule set. So, a professional trader might only take a few very high quality trades per week, whereas the rookie is like after every trade they can see.
If I was to give an analogy to this, it would be like a sniper versus a machine gun. New traders are very trigger happy, whereas professional traders have the patience to wait and let the good trades come to them. All right, line number five is you need a huge account.
People think you need 100K to start trading. Actual reality is you can start small. What matters more is skill, discipline, risk control, and money management.
Professional traders focus on percentage returns and not account size or P&L. And I'll give you an example why this is important. A 5% return is 5% return whether it's on £1,000 or a million pounds.
The skill is pretty much the same. So prove to yourself that you can generate a return and then worry about the money later. Lie number six is leverage makes you rich faster.
People believe that leverage is the secret to massive profits, but it's a double-edged sword. Leverage simply magnifies risk. Most beginners misuse leverage and blow accounts over and over and over again.
I've seen it. With high leverage, a 1% market move could wipe out your account. And if you lose 50% of your account, you've then got to double your return.
You got a 100% back just to get to break even. Professional traders use leverage very, very carefully. And lie number seven is trading is gambling.
What people believe is trading is just guessing. When in reality gambling means that you have no edge and it's random outcomes. Whereas trading, professional trading is a strategy.
It's probabilities. It's risk control. And a professional trader is closer to running a business and managing probabilities than it is going to the fruit machine in Vegas.
Each trade is just one event in a large sample size. And on that point, I want you to think about when you go to the casino and you see all of the people having fun doing roulette table and all the rest of it, they're going to lose money over time, right? You might get a couple of lucky ones that stop and go home.
But when you look over at the tournament table, semi-final, every night it's the same players. So the same people are getting to that semi-final. Why is that?
Well, it's not to do with the actual sport or the game or whatever it is. It's the approach. You either decide to take it the approach as a gambler or you take the approach as a professional with a plan.
That is no different in trading. So, trading isn't about secret indicators or overnight success. It's about understanding probability, managing risk, and developing a skill over time.
And when you start looking at trading this way, everything will change for you. And if you want to understand how trading actually works from the ground up, watch this next video or go and check out my trading for beginners series. Or if you're really feeling brave, you can go and check out my 30-day trader challenge.
Let me know in the comments what one of these you've got a perception of or you was duped into and we'll try and raise awareness for this community. And until next time, take care and I'll see you then.
