Trading in financial avenues is the most effective technique to accumulate wealth. Unfortunately, it has a poor reputation. Thanks to the trading misconceptions that are circulating in the market. People are reluctant to put their hard-earned money at risk despite being tempted to invest. Are you one of them? Then, by the end of this article, you might reassess your decision.
Putting The Top Five Trading Myths To Rest
Trading misconceptions concerning stocks, binary options, cryptocurrencies, forex, and other financial instruments may be perplexing for to-be and newbie traders like you. Such fallacies restrict you from profiting and prospering. But not anymore because I am here to disprove them with facts.
Trading Binary Options Is Illegal In The United States
If you are under this impression, here is an official statement from the Commodity Futures Trading Commission (CFTC):
“It is illegal to attract US citizens to purchase and sell commodities options, even if they are referred to as ‘prediction’ contracts unless they are listed for trading and traded on a CFTC-registered exchange or are lawfully privileged.”
In layman’s terms, commodities or binary options are permissible in the United States if one of the below requirements is satisfied:
- Broker lives in the United States.
- The broker is CFTC-registered.
- Broker refuses you binary contracts.
Trading binary options in the United States is legal if you meet the CFTC’s standards and your broker follows rigorous restrictions and regulatory control. To avoid issues, do your research to solicit the best broker.
Trading Is A Scam
No trading is not a scam; otherwise, why would a regulating body like the CFTC allow it? Hence this is purely a myth. On the other hand, trading scams are a reality, and you may fall prey. Some con-artist brokers are ready to attack you with tempting deals.
Let’s imagine you met someone who claimed to be a binary broker. They may present you with a forged identity and identification card. They will persuade you to give them money for them to make lucrative investments on your behalf. They will steal it and flee when you provide them with cash, leaving you in the dust. And you’ll be thinking, “How do I get my money back from binary options fraud?”
You may also fall victim to scams involving cryptocurrency, stocks, and other investment vehicles. As a result, to avoid this, always use the services of a licensed and reliable broker. Do a background check on their trade history, location, and years of business, and you’re set to go.
Another possibility exists to clarify this myth. Some traders defraud themselves and then disseminate the rumor that someone else cheated them in the market. Such traders are idiots who are hell-bent on investing their hard-earned money despite having no trading knowledge or experience. They only have one unrealistic goal: to become a millionaire overnight. In a nutshell, trading is not a scam, but brokers and inexperienced traders are.
Binary options, cryptocurrencies, and stocks are all legal trading vehicles. You must first educate yourself, risk a moderate amount, find the right broker, and trade cautiously to profit from them.
Cryptocurrency Is A Real Money
Cryptocurrency, or digital currency, is meant for two consenting individuals to transact without the need for third parties, thereby pushing banks and governments out of the monetary cycle. Hence, it is not real money. It is not the same as traditional payment systems such as money notes, checks, credit cards, etc.
Moreover, as a form of payment, crypto money is very unreliable. It is due to the dramatic volatility in the value of most currencies. The changes are so significant that a $10 note can become $100 in a week. As a result, it is too erratic to be a viable payment option yet too lucrative an investment to make a profit.
Trading Bonus Is A Real And Free Money Earned
Several advertisements on the internet offer you a free bonus if you deposit funds at X broker. Kindly resist the temptation since it is a ridiculous myth. Unless you are astute enough to read the terms and conditions, which most people do not, you will sign a turnover contract.
The contract mandates you to turn over bonus money to the x broker or x app minimum of 20 to 40X. You can only use the funds for trading and nothing else until you fulfill the requirement. You will also be unable to withdraw it. As a result, a trading bonus is not free money but rather a lot of inconveniences.
Inconvenience since you will trade on leverage, which is risky and invites losses. Thanks to your hunger for bonuses, you will invest more money than you can afford. Trading bonuses are not worth your time or money; therefore, avoid such advertisements.
To Trade, You Need To Have Lots Of Money
The misunderstanding that trading is just for the wealthiest is troublesome. You don’t need millions or thousands of dollars; a little investment of as little as $100 and some faith would suffice. Start little, make profits, reinvest, withdraw the initial investment, and continue trading with gains.
Trust me, this strategy will not turn you into a pauper, and with time, you will be playing in large numbers. Alternatively, if you are just getting your feet wet in the trading market or returning after a long break, start small, even if you are rich, and use the same strategy described above.
Pro tip: Don’t wait for a considerable saving milestone. Instead of depositing $X into a savings account, invest it in financial vehicles. You will lose buying power since the interest earned on your savings account will be lower than the inflation rate. Investing in the trading market, on the other hand, will make you profits while also diversifying your portfolio.
To conclude, several trading myths keep people from capitalizing on trading opportunities. If you’re hesitant, don’t be.
Leverage trading to build wealth for goals such as financial security, financial freedom, early retirement, lavish lifestyle, etc. But do so responsibly and with caution.
Also, don’t forget to pull out the initial investment; doing so will save you from losing your hard-earned money.