Worst advice you know?

Rambo35

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A lot of different traders, a few success stories and every once in a while some golden advice; I think that sums up forums. I have read some really good newbie tips, some I would give myself and some that had a different twist, but made perfect sense.

When it comes to trading, as long as you get the results you seek who cares how you do it. I wanted to ask what was the worst advice you read and which was totally wrong and misleading new traders?
Some may have a long list, but among the ones I can think of is that high leverage blows your account.

It is not true as leverage has nothing to do with your losses. The lack of risk management, absence of a solid trading strategy and the lack of key attributes such discipline and patience are to blame for your losses (there are more than that).

I look forward to what you guys have to add.
 
High leverage makes it easier for someone who doesn't understand risk to blow an account more quickly, but a determined newbie can blow an account with 1:1 leverage.

Some of the worst advice I've seen:

Buy this product now and start making tons of money. No previous trading knowledge needed.

Start trading live on day one. You'll learn what buttons not to press by experience.

Add more money to your account so we can help trade back the losses we caused.
 
but among the ones I can think of is that high leverage blows your account.

It is not true as leverage has nothing to do with your losses. The lack of risk management, absence of a solid trading strategy and the lack of key attributes such discipline and patience are to blame for your losses (there are more than that).

I look forward to what you guys have to add.

What you have just said is the worst advise I know!
"leverage has nothing to do with your losses" LOL

99.9% of newbies loose their account because of leverage!
I have never known a FX trader to loose their account when they don't use leverage;)

I guess it boil's down to which country you come from, Janks don't care how much leverage they use as there's always the tax payer to bail you out! the to big to fail bankster's and newbie trader's:)

You are full of it and your country's BROKE because of leverage, Get a grip!
 
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For a new trader, placing SL is a bad advice as price temporarily goes in the opposite direction and touch the SL (even you place it far) and then after touching your SL, it goes in your favor but by then you are out of trade! I see this happening so many times! But if you do not place SL, you will be in the game and if you wait 1/2 day (seeing minus figures), trade will reverse and come to your line unless you trade against the trend!
 
Low leverage...always place SL...etc2...all what sane and professional traders practice to the book.

....hmmmm....I think I better bite my tongue here or else I will be blasted off the planet:p
 
I seem to recall that some unleveraged stock traders use a reasonable SL.

Also, more than one newbie stock trader using no leverage (and no SL) has blown an account.

Anyone can drive a car off a cliff, even if they are driving really slowly. In trading, leverage is the equivalent of driving much faster. If the road has tight turns and you drive too fast for your level of experience and the conditions of the road, the results are easy to predict.
 
I seem to recall that some unleveraged stock traders use a reasonable SL.

Also, more than one newbie stock trader using no leverage (and no SL) has blown an account.

Anyone can drive a car off a cliff, even if they are driving really slowly. In trading, leverage is the equivalent of driving much faster. If the road has tight turns and you drive too fast for your level of experience and the conditions of the road, the results are easy to predict.

I've never heard of someone blowing an account with leverage of 1:1.. would take a long time considering most FX pairs trade within ranges rarely larger than 10%

Hell some take months and months too move just 5%

I do agree that the worst advice is "Pay $5000 for our 2-day workshop in order to learn a 100% time proven strategy!" - Makes me glad that I started trading so young (19 years old) that I didn't have the money to be conned into such seminars.. Especially considering that many brokers offer the same content free of charge!
 
Also, more than one newbie stock trader using no leverage (and no SL) has blown an account.

They must be the unluckiest trader alive as the way I see it the only way to loose 100% of your money in a stock is if the company goes into administration and they haven't traded the stock,this is why you should never put all your eggs in one basket and I dough many stock trader's only trade the one stock!
 
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Usually, the newbie stock traders give up after losing 75% or so of their accounts.

Yes, they are usually the ones who put all their eggs in one basket on a "sure" tip. Diversifying one's trades is another part of risk management in any market.

In forex, it would be hard to get a margin call trading 1:1, unless Bernake is speaking, then all bets are off. Then again, it would be hard to make a significant return in forex only trading 1:1.

Understanding the implications of leverage and using it properly is the way to trade forex. Thinking "Wow! 2000:1 plus a 100% bonus = 4000:1 leverage. I'm going to get rich SOOO fast!" is a fast track to a margin call.
 
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