There is a ton of hype in the stock market. Many "Guru's" talk about how they can double their money in just 1 month with little effort and only with a easy to follow system. It is no wonder why so many people believe that they can just get into the stock market and start making bucket loads of money overnight.
Because of this there are a few things that new traders tend to overlook when starting out in the market.
1. There are Bumps in the Road
There are so many stories about Guru's and stock traders who have turned just a few thousand dollars into millions of dollars in just a year or two. This is great, but it doesn't mean that you can just jump into the stock market and expect the same results.
A great trader can make 20+% on their investment in a year. To simply expect that you will come into the industry making several 100% of percentage points return over the course of a year unrealistic. It is kind of like someone just learning to swim entering the Olympics in the 440 yard breaststroke and expecting to beat all the professionals who have been practicing for decades.
Trading is a game and it requires practice. If you want to get good at it, it requires work.
2. Losses Need to Be Considered
People tend to be in a state of "Ah" when they see a professional trader who has made a 300% return on a trade in just a short period of time. While it is possible to see trades like that, there are also losses that occur in the market.
It could be that out of that 300% return 250 of the 300 went to replace money lost on other trades and all and all his account is just up a little bit for the month.
3. Not Everyone Should Trade Stocks
Over 90% of businesses fail, the same can be said with trading stocks. Most of the people who enter the stock market with the goal of making a large return will actually fail at it. While most people are capable of doing it, the only ones who really can see everlasting success tend to be the ones who put the time and effort into it and keep learning whenever they fail.
Because of this there are a few things that new traders tend to overlook when starting out in the market.
1. There are Bumps in the Road
There are so many stories about Guru's and stock traders who have turned just a few thousand dollars into millions of dollars in just a year or two. This is great, but it doesn't mean that you can just jump into the stock market and expect the same results.
A great trader can make 20+% on their investment in a year. To simply expect that you will come into the industry making several 100% of percentage points return over the course of a year unrealistic. It is kind of like someone just learning to swim entering the Olympics in the 440 yard breaststroke and expecting to beat all the professionals who have been practicing for decades.
Trading is a game and it requires practice. If you want to get good at it, it requires work.
2. Losses Need to Be Considered
People tend to be in a state of "Ah" when they see a professional trader who has made a 300% return on a trade in just a short period of time. While it is possible to see trades like that, there are also losses that occur in the market.
It could be that out of that 300% return 250 of the 300 went to replace money lost on other trades and all and all his account is just up a little bit for the month.
3. Not Everyone Should Trade Stocks
Over 90% of businesses fail, the same can be said with trading stocks. Most of the people who enter the stock market with the goal of making a large return will actually fail at it. While most people are capable of doing it, the only ones who really can see everlasting success tend to be the ones who put the time and effort into it and keep learning whenever they fail.
About the Author:
For more stock trading tips or other information on stocks visit Shaun's site on the to help people learn stock trading. This article, Overlooked Facts About Stock Trading has free reprint rights.
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