1. The first myth about trading is that you have to identify what kind of trader you are.
("I trade the BSE Small cap" or "I trade Forex.") Wrong!
There is no rule that says someone who usually trades stocks can't trade forex.
There is no reason why a forex trader can't take advantage of a run-up in crude by buying oil futures.
I can't tell you how many times someone has said to me something like "I trade the Dow eMini on a one minute chart and I'm getting killed!! What should I do?" The answer is obvious. "Don't trade the Dow eMini on a one minute chart. Trade something else."
Successful traders must have open minds and be versatile. When you are looking for something to trade, you should have only one demand:
"Show me the money!"
The second myth about trading is that you must be able to identify patterns, waves, retracement levels, etc. to be a successful trader. Wrong!
This borders on insanity and is the last thing you want to concern yourself with.
For every successful pattern you show me, I can show you five examples of the same pattern that failed.
This is an invention of the Trading Mafia (those guys who line their pockets by spreading misinformation) to keep you convinced that you need them and can't possibly be a profitable trader on your own.
It kind of reminds me of a book I saw once:
"99 Ways to Beat the Horses."
My though was that if just one of them worked, you wouldn't need the other 98!
The third myth about trading is that you will benefit by paying a trading service and following their trading selections. Wrong! Wrong! Wrong!
You must understand that trading is a solitary endeavor. You are trading against other traders.
If you were a boxer, would you discuss your next punch with your opponent? Of course not! When I day-trade stocks, I often buy a thousand shares of a stock for a trade. If just one other trader is trying to make the same trade, it could push up the price of the stock I'm trading.
On a thousand shares, a difference of 0.01 in price means that I must pay an extra 10.00 for the stock. A difference of 0.10 means I have to pay an extra 100.00 for the stock.
If I tried to make the exact same trade, at the same time, as say 100 other traders it could cost me thousands of dollars a week in missed trades and bad fills.
If you don't think that the same thing can happen in a huge market, like the forex market, think again. The forex market is segmented by broker, and any forex trader will tell you that bad fills can be a problem.
