Why trading is not as nice as they paint it
The trading is hitting very hard in Spain for a few years and more and more people are entering it with the intention of making money . The problem is that many do so with little knowledge about the world of investments and pretending to get the money quickly and easily. In other words, they seek to hit the ball.
In many places you will read that it is enough to have a computer, an internet connection and a little money saved to start trading. They will also tell you that many traders hardly work one or two hours a day and that they get big capital gains. Is this true that they tell us or are there hidden traps?
We do not want to be short rolls but we have the obligation to tell you that the image that is given of trading is quite far from reality . Making money with him steadily over time is very, very difficult. Remember that you invest in the short term, sometimes even on the same day (day trading), so volatility and risks are very high .
DISADVANTAGES OF TRADING
These are some of the most important drawbacks of trading:
1º. The bag is unpredictable
As much as some analysts preach the opposite, it is impossible to know with certainty what will happen on the stock market . You can do some analysis or predict certain short-term trends, but getting it right in the long term depends on chance. You will earn money with trading when markets rise and you will lose when markets fall .
2º. It’s a very stressful job
The job of the trader is to make money by growing your own money . But if you have a bad day and make a mistake or simply if the market hits an unexpected downturn, you will lose money, your money. You have to have a very cold mind and be able to control emotions to withstand the stress level of a job of this type, in which a bad decision can lead you to ruin.
3º. It requires a lot of dedication
Traders have to continually consult what happens in the stock market, what companies go up, what they go down, what decisions the FED or the ECB makes, what happens in Japan … Information is the fundamental tool for their decision-making, so they do not There is no other way than to be informed at all times about what is happening in the financial world.
4th If you want to be serious you will have to go into debt
It is impossible to live on trading as a main job if you have little money to start. That is why it is quite common for traders to borrow (leverage) in order to have more money with which to operate and thus be able to obtain higher profits. The problem is that if they do not do well, the losses will also be greater and could end up ruined .
As you can see, trading is not as nice as they try to sell. You have to be very cautious and willing to take great risks . The alternative is to invest in the stock market in the longer term although the benefits may be lower. Sometimes it is better to earn little but be able to enjoy a quiet life without frights.