The Four Mistaken Beliefs of Traders


Sorry to burst your bubble but failure is the highest probable outcome for most in this business. Failure doesn’t come because the markets are “rigged” or the belief that “they” are monitoring your odd lot trades to take the other side only to cause you pain in some nefarious conspiracy. No, the reason most people fail at trading comes from within.

Here are four of the most common beliefs of new traders that I’ve seen.


From the expectation of bouncing from trendline support or market is overbought should correct, Making millions doesn’t get much easier than that, right? The only thing easy about the market is losing your trading capital.

The markets are not easy. What would you think if fresh MBBS graduate doctor will like to conduct surgery on you first time ? If you came into the markets thinking it’s easy to make money you’re wrong. Perhaps you were naive and you’ve had some success, great! However, you are not the rule but the exception.


Many retail traders come to the markets after losing a job. They were up late watching TV, ended up attending a seminar at the conference center at some hotel and you get the idea. If the intent of trading is to replace an 80K salary then plan on working five times harder and twice as long to EARN that in the markets.
Undue pressure mounts as each trade “needs” to be a winner in order to pay the EMI’s of Home and Car loan. Nobody needs THAT hanging over them, especially at the beginning of a trading career. Do yourself a favor get some other form of income while you learn to trade part-time.


After failing on my own in the markets the best decision I made was to seek out a mentor. I needed someone who had a vast knowledge of the markets that could give some guidance because I had no idea where to focus my efforts. I was fortunate to get a Trading Guru Most are not so fortunate.
There are, however, plenty of mentors out there to learn from. Do your due diligence in finding someone who participates in the markets in a similar way that you’d like to. Ask questions. Never assume. If they want to help you, you’ll know pretty quickly. Once a relationship is formed, learn graciously.


When I began my trading career. I believed that I had to have a position on at all times or I wasn’t making money. True, in a sense, but having a position on when I shouldn’t was losing money.

The belief of always having money at work is very common among newer traders. It’s OK to be in cash on the sidelines. Forcing trades isn’t profitable over the long haul. Doing so leads to low probability trading that eventually wipes out months of profitable trading. Take the downtime as an opportunity to review your trade metrics, hone your edge or conduct some market research. If you still feel the need to trade then perhaps there’s an addiction issue that needs to be addressed.


The message of this article isn’t to say that you can’t be successful at trading. The message is that being successful (with longevity) takes more time, money and discipline than most individuals are willing to commit to. Personally, I had an 18-month learning period before I became a better trader. After two years I was still not profitable, but better at managing risk. It took me nearly three years and lakhs of rupees to become profitable after finding my niche in the market.

If longevity is your ultimate goal of trading then humble yourself as humility is a prerequisite for knowledge. Roll up your sleeves because the hours will be long and the work is mentally taxing. Over time you’ll learn to respect the varied nuances of the financial markets while finding your niche

10 thoughts on “The Four Mistaken Beliefs of Traders”

  1. Recently i came to know about your blog and i got little confidence to continue with sound knowledge..

  2. Excellent insight…I want to read everyday to remind me of the reality..your personal experience added immense value to the post.

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