CLICHES ABOUT INVESTMENT YOU SHOULD AVOID

20 July 2020
Cliche 1; There are Trading Keys of the "Pros".
The first thing we need to take into consideration is what it takes to make moves in a market. It takes trading. It takes participation. Necessarily, anything that is 'secret' won't be known by many individuals. So if it's a key, few people will be trading it. Otherwise, lots of people are trading a secret level or strategy, after that think what there's possibly not going to be a significant reaction to their activities.

One more consideration is the mention of "The Pros" to begin with a lot of retail investors profession 'outright' settings-- getting to sell higher or selling to acquire lower. When it involves professional trading, this is simply a part of what takes place. Institutional traders are making markets, arbitrage trading, spread trading all sorts of points, so the use of the word "Pros" is usually absolutely nothing greater than an advertising and marketing hook due to the fact that what retail traders do bears little partnership to what a lot of specialist investors do.

Cliche 2; You Need to be a Contrarian to Generate Income out there.
If you spend at any time on social media or checking out financial investment e-newsletters, you'll constantly find some loud voice yelling regarding a contrarian indication for the supply market and the "wise" cash is releasing. Complying with recommendations such as this is harmful to numerous factors. Initially, it's based on the snooty assumption that the entire globe is wrong and this voice is right. Also for fantastic people, this is an uncommon event. The whole world is right most of the time, a minimum of when it pertains to the stock exchange.

Cliche 3; Correct Finance Can Make a Bad System Profitable.
This turns up extremely often because there's a trading publication which details a random entrance system with a trailing stop. Over a one-decade duration, they revealed it would have earned money. That appears impressive on the surface but what they actually produced was a fad adhering to the system.

The counter-trend arbitrary entrances would quickly obtain quit out, and the with-trend random entries would certainly ride the trend. So whilst the entry part was arbitrary, the system was a pattern follower.

Cliche 4; There are Loss/Risk Free Trades.
The term "Risk free market" is usually related to alternative approaches, and frequently, it's a pitch about using options to transform your losing professions into winners with options. When you earn money in a trade, that cash came from somewhere, and somebody had it in their account and also now it's in your own.

Cliche 5; Short Selling is as well Risky for the Average trader.
Short selling is a misunderstood principle by many ordinary financiers. Some merely cannot grasp the general idea; some believe it is 1,000-fold riskier than buying; some merely think profiting on a share price decline is unpatriotic. None of these points holds.

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Steven Rich
Sep 17, 2018:
Well done
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