Misadvice is the easiest, most reliable way for traders and investors to say goodbye to hard-earned money. Today, the Internet and numerous books, memoirs of famous traders, textbooks, and blogs are filled with such “bad calls.”
A few of these authors can boast of particular success in Forex or the stock market. Still, they all have controversial results.
Profit Center FX experts share the top list of “bad calls” one should avoid like a plague.
Buy on The Rise, Sell on The Fall
Buying on an uptrend and selling on a downtrend is a classic fallacy that entered the world of trading and investing in the late 90th. Today, the dynamics of quotations are too volatile to put it all at stake. As a result, an upward or downward trend can be identified only after a certain period. Therefore, beginners, trying to apply this “rule,” buy at the maximum and sell at the minimum with dismal results.
Stock Market Is More Predictable Than Foreign Exchange
Another widespread misconception. Investing in securities is riskier than Forex. If the goal is long-term trading with a planning horizon of several years – trading shares really makes sense.
The medium and short-term trading on the traditional exchange is more unpredictable than on the Forex market. The exchange does not quote assets around the clock. As a result, the risk of gaps formation increases. Meanwhile, enthusiasts that apply fundamental analysis have to consider the reports of companies and industry prospects instead of relying on 3-5 macroeconomic indicators.
The Stock Exchange Goes Up Most of The Time
Actually, if you check the dynamics of the daily or monthly quotes of the S&P500 index, the optimistic price trend can be easily traced. However, as the scale increases, the situation changes dramatically. Don’t forget about the corrections. A sharp change in dynamics can lead to a quick drain of the trading deposit.
In addition, the stock exchange is also influenced by the so-called “black swans.” At such moments, private investors go bankrupt. The same goes for the biggest investment companies, banks, and hedge funds. The 2008 crisis or the Covid-19 are vivid examples of this.
All Brokerage Companies Are the Same
Choosing a trusted broker is a crucial thing that influences a trader’s success. A decent brokerage company is not only a modern and user-friendly website. What is more important is the software it uses to maintain a proper level of work even in the most critical situations. Only this way can a brokerage ensure the timely execution of orders.
For those investors who want to create their own brokerage business and engage clients more effectively, we recommend contacting Profit Center FX – an experienced integrator and supplier of advanced software. Profit Center FX integrates professional software, provides round-the-clock technical support, and can help you start your own brokerage company in 3 weeks!