There are many myths about short term trading these are the “text book? stereotype. The myths are often wrong or based off of bad assumptions.
There are many myths about short term trading these are the “text book? stereotype. The myths are often wrong or based off of bad assumptions.
These myths are
1. Speculators don’t make money when the markets go down. No, unlike long term investors who get hurt by such things as market crashes short term traders can take full advantage of downturns in the market by buying puts or shorting the stock. I never understood where this myth came from considering most if not all short term traders do not mind playing the downside.
It’s impossible to have only winning trades, so the goal is to manage the dollar amounts of your trades (both wins and losses) even more than the number of trades taken. Traders come to realize very early on that the quality, not the quantity, of trades is what matters.
The glory of trading is that there is always a million dollar return lingering right around the corner. Think back 15 years to the start of the 1990’s bubble and how many millionaires were made in just a few years, and then look at all the wealth that was wiped away in 2001 and handed to the shorters. Just a few thousand dollars in the 90’s hottest internet stocks would have made you a millionaire in less than 5 years. We’re talking life-changing results here.
