Money is usually the first thing that drives regular working folk into thinking about trading, which is fine. Then it turns to the freedom trading can bring.
Imagine waking up on your own time, working from literally where ever you want, deciding your own salary etc.
Obviously its enticing, but the out of all those reasons, i truly feel one of the most dangerous beliefs in trading is the belief that everyday will be a 75% gainer, or 100% gainer.
This belief usually stems from 2 major issues.
1.) Watching “Professional Traders” rave about there huge percentage winner.
This can be misleading because what people often do on social media is only post the good times, such as good winning trades. We rarely ever post the bad things, like a huge trading loss.
What this does to a beginner trader is it gives the illusion that you can only make money from trading and take no losses. It also gives the illusion that you can trade and only be making huge percentage gainers.
This is a very dangerous belief because it gives the trader unrealistic expectations when they hit the market. Its one thing to expect huge returns and only make “regular” returns. Its another problem when you expect to make huge returns and not lose, and then lose.
2.) Trading In Hindsight
I’m still guilty of doing this, but I have it more under control now. Lol.
This is where you look at a huge percent gainer from the past, and say “OMG, If I just bought 10,000 shares at $1.50 and sold right at the top…
I WOULD MAKE OVER $100,000…
Ya, well your math would be correct, but the chances of you being able to hold 10,000 shares from bottom to top is not realistic. I’m not saying its impossible, but I have yet to see someone play a move like this perfectly WITH big size.
Most people wouldn’t even be able to hold through all those gains with 500 shares.
Its important to avoid thinking about hitting stock scenarios perfectly because these types of trades don’t happen that often. The trades that will take you to the next level will always be the most consistent trades you make.
They are the foundation of your trading profits, while huge percetage gainers are nice, they usually won’t turn you account from $10,000 to $250,000.
It will usually be the smaller gains that you rack up day in and day out that will reach you to your account profit target.