Few Misconceptions About Traders and Trading

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The history of the stock market is a fascinating one. Many associate stock trading with the hustle and bustle of the 20th century. However, the truth is that history of trading can be dated back all the way to the 17th century. In 1602, the Dutch East India company was founded, and pretty soon, they held the monopoly on trading with Asia. It was the Dutch East India company that introduced stock trading, by allowing shares of the company to be purchased by individuals. Four hundred years later, the stock market is larger than ever.

In the past few decades, the stock market has undergone a massive change. It used to be that only certain people, business insiders, could trade stocks. However, nowadays, thanks to online trading platforms such as https://tradingplatforms.com/za/, have enabled private citizens to participate in the market in equal measure. It is, in large part, thanks to this popularization, that many misconceptions and myths about trading have been debunked in the past decade. However, many still persist. In this article, we would like to talk about a few of these myths and misconceptions, and give an honest assessment of their accuracy.

Traders Must Be Good at Math

When people hear the word “finance” the first thing that often pops to mind is miles-long paper sheets, stacked with numbers. This unfortunate association often times brings back bad memories of high-school algebra, stern mathematics teachers, and other, similarly-unpleasant memories that one would rather bury deep. And it is this same unfortunate association that discourages quite a lot of would-be traders from trying out their luck on the market. After all, if you are a trader, you must be good at math, right?

Well, we are here to tell you, that no, trading does not necessarily require advanced math skills. Yes, there is a degree of mathematics involved in trading. Namely, you need to quantify how much money you would gain from a winning trade, or lost from a losing one. However, this requires absolutely no complex mathematical formulas, and even the numbers, you can work out with a calculator. So, in other words, mathematics, while a welcome skill, is not a mandatory one.

Takes a Lot of Money to Start

One of the biggest misconceptions is that trading is an activity in which only the already rich can participate. Now, this misconception may have some roots in truth. After all, for a long time, trading was reserved for those who were already broken through into the financial sector. Looking through the history of the stock market, there certainly has been a bias towards people who are already wealthy. However, today, that bias is significantly lessened, or even non-existent.

You see, thanks to discount brokerages and online trading platforms, trading nowadays is available for everyone. Savvy traders or business savants who want to try their hand at stock or forex or any other market, but think that they don’t have enough cash need only remember this: in 2022, even $500 is enough to simply get you started. From then on, you will need to apply all your skills and knowledge in order to make a profit.

Trading Engulfs Your Life

A major notion that discourages many from participation on the trading market is this idea that becoming a trader will completely engulf your life. You will have no time for partners, friends, family or any social life whatsoever, and as a result personal relationship will suffer for it. However, this notion could not be further from the truth.

Yes, there is a period in your trading life that will take time and effort. That is the starting period, where you are still learning how the market works, the rules and regulations of the markets you want to trade in, and the general ropes and tricks that go into trading. However, once that is done, and you’ve found what you were looking for in terms of trading, you will have a lot more free time on your hands.

Furthermore, even during the “training period”, you should not spend all of your time on the business side of things. Managing time is something a lot of people struggle with, and that is why it is so important to choose the right stock app. Not only do they help you make a profit, but they also offer tips and tricks for managing your time.

Conclusion

We hope that this article has helped clear up any misconceptions you might have had about the life of a trader and the practice of trading in general. Perhaps, if you were hesitant to start trading due to some of these myths about the practice, all your doubts have been cleared up, and you can now try your hand and maybe earn some extra cash on the side. Whatever choice you make; we wish you luck in your future endeavors.

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