There are more trading myths out there than most people suspect. It’s essential to learn the most common ones and understand why they are wrong. Here are the top offenders in the class that can easily be debunked.
Data security is a problem
Top brokers rarely encounter data security problems, and when they do, it makes the news. Using a computer to buy and sell securities entails no more a risk than traditional ways of doing business.
It’s tough to learn the basics
Those who take free trading courses can put this myth to rest immediately. It’s quite easy and fun to acquire the core skills needed for operating in the securities markets as an investor or trader. Taking no cost courses is an ideal way to boost your current level of knowledge and become a better trader. Many people from all walks of life purchase and sell assets every day on various exchanges.
Expert computer skills are a must
In the early days of computer-based accounts, users had to be proficient with data entry and other core IT skills. That is no longer the case, particularly with the advent of the smartphone and simple platforms. For many, electronic methods are easier than calling or visiting a broker’s office to place an order.
Accounts are auto-traded by bots & apps
Accountholders can sign up for auto trading, but most net-based transactions are performed by users who are not robots or apps.
Fees are outrageous
Digital brokerages tend to charge lower fees than traditional firms. The recent trend is for internet-based companies to charge very low or no fees at all for common transactions like buying and selling shares, forex, and options. With the right stockbroker comparison, you should be able to quickly decide which brokers charge competitive fees.
Most lose everything
This myth has been around for decades. It was first applied, incorrectly, to futures traders. Nowadays, you’ll hear it about those who deal in forex, cryptocurrency, day trading stocks, and many other asset classes. It’s just an urban legend based on zero facts.
Taxes are higher for online profits
There are many things about taxation that are complicated, but this idea is simple. It’s that whether you earn profits online or via an in-person brokerage firm, you’ll pay the same in taxes on the gains. Likewise, online and traditional losses are also taxed at the same rates.
Markets are open 24/7
The internet is a 24/7/365 affair but trading markets and exchanges have operating hours. Most reflect banking schedules in their home nations, but others are more wide-ranging. Forex exchanges are open for nearly five days straight.
Accounts are not IRA-eligible
Online accounts can be IRA-eligible if you set them up correctly, fill out the proper forms, and abide by the government’s rules for retirement accounts.
System crashes will wipe you out
System crashes are very rare events and happen to online and offline traders when brokerage networks temporarily stop or break down. When computer-based brokerage services were new, many had a phobia about system crashes. The myth persists today but is beginning to die out.