10 RISK MYTHS: TRADING MYTHS vs REALITY
10 Risk Myths. http://www.financial-spread-betting.com/Trade-risk-size.html PLEASE LIKE, SUBSCRIBE AND SHARE THIS VIDEO TO HELP US DO MORE. These are things you often hear about trading, surrounding risk that are most likely not true.
The 10 Biggest Trading Myths That Just Won't Die
1. Stop will protect you. Yes, most of the times they will give you protection but they don't offer protection in some situations say, a stock that gaps overnight or extreme moves.
2. Pair trades are not risky. Buying one asset and selling another correlated asset attempting to trade the differential between the two.
3. Tight stops = less risk
4. Quiet markets are less risky. I reckon quiet markets are more risky because there's nothing much happening and you tend to want to trade more and force stuff.
5. You don't blow up if you know what you're doing. Risk comes from places we don't really see which is why we have periods of market crisis.
6. Forex is less risky than stocks. Newsflow does move currency pairs. And minor shares and exotic pairs do move like tech stocks sometimes!
7. Gaps are dangerous. If you're not allowing for gaps, yes they are dangerous because you're not prepared for them.
8. Less time in a trade = less risk
9. Unexpected moves cause the most risk. Most people don't get wiped out by an unexpected move...
10. The biggest risk comes from the market. The biggest risk comes from ourselves. You won't make money from the market if you don't take risks. The biggest risks come when we're trading on tilt and letting our emotions get the better of us.
6 Day Trading Myths Versus Reality