When navigating online trading recommendations, it’s easy to come across information that goes against the grain of conventional financial wisdom.
Some of these bits of advice are questionable, while others can be straight-up harmful to your financial outcomes.
Octa, a regulated and trusted broker, breaks down some of the worst advice traders can follow and describes potential consequences that can ensue while offering viable counterarguments.
Harmful advice #1: forget about brokers’ reputation
Imagine a trader who doesn’t care whether their broker is regulated and trusted, focusing solely on short-term financial gains mentioned in ads. This approach can be rooted in the unwillingness to go into too much detail when choosing a broker.
After all, the difference between regulated and unregulated brokers often becomes evident only with time. It’s not always possible to spot a difference from the get-go, especially for less experienced traders.
In reality, regulation plays a crucial role in defining brokers’ reliability. Some unregulated brokers may engage in unethical or illegal practices, such as unauthorised trading, churning (excessive trading to generate commissions), or offering fake investment products.
In the long term, a more reasonable approach would be to choose an experienced and globally regulated broker whose trustworthiness has been proven by traders’ reviews. If a broker meets the strict criteria of multiple regulatory bodies from various regions, it is much more likely to be a safer choice for traders.
Harmful advice #2: Withdrawals are always easy, don’t fret about it
It’s only natural for those starting their trading journey to look only one step ahead and focus on achieving financial gains first. After all, tapping into a viable source of supplementary income is one of the main reasons why people start trading in the first place.
It may seem that once traders have reached their financial goals, cashing in their profits should not be a problem. However, this is where things can easily go wrong unless you have carefully chosen your broker based on public information about its withdrawals.
By establishing a transparent, user-friendly transactional mechanism and offering a wide variety of withdrawal options, brokers show a client-oriented approach to business and send a clear message to their clients about their reliability.
To keep abreast with the industry benchmarks, Octa, a globally recognised broker with more than 14 years of experience, offers a fast and efficient withdrawal procedure confirmed by real-life traders’ reviews. All Octa’s fees and conditions are fully disclosed in the broker’s terms and conditions, creating a reliable trading environment.
Harmful advice #3: Don’t pay attention to trading conditions
At first glance, trading conditions offered by a broker may seem a minor detail that is not worthy of consideration. After all, if your strategy is viable and you execute it perfectly time and time again, what can go wrong? But it is worth remembering that in trading, gains and losses are marginal most of the time, and long-term success highly depends on the broker’s fees.
When choosing a financial broker, the more you know, the better. This is especially applicable to trading conditions. Choosing a broker with advantageous conditions, including low spreads, efficient withdrawals, and transparent fees, may not yield immediate gains, but will have a considerable long-term impact on your outcomes.
When starting trading with a broker, always make sure to test their advertised trading conditions before fully committing your deposits. Only brokers that are fully transparent about their charges are worth your trust. For example, Octa Broker’s long and successful track record and lack of hidden fees can be verified through thousands of positive online reviews. However, for any trader, the best way is always to test trading conditions firsthand.
Harmful advice #4: In trading, caution is for the weak
For a new trader, it may seem that risk management tools are only applicable if you deal with extra-fast time frames or place many orders simultaneously. Otherwise, there is no point in wasting your time on insignificant details since a couple of high-risk trades will likely determine your success.
However, it couldn’t be further from the truth. Stop-loss and take-profit orders are a must for any trader, regardless of their style and asset preferences. When traders focus on short-term profits and disregard the strategic aspect of trading, including using risk management tools, they enter the realm of random outcomes, which doesn’t operate in their favour.
Ignoring risk management tools and fully trusting your emotions during the stressful moments of high market volatility is almost like trying to extinguish fire with gasoline. Trading becomes much less stressful and more efficient if you approach it with a cool head and use all the tools at your disposal to navigate sudden bursts of volatility.
Conclusion
In trading, following the fundamental rules from step one is essential for long-term success. These rules include choosing a reliable broker, since this is the only way to ensure a smooth trading experience overall. By ensuring fast withdrawals and a transparent, clearly communicated fee structure, brokers enable their clients to achieve their financial goals—and thus build up their reputation for the long term.
Trading involves risks and may not be suitable for all investors. Use your expertise wisely and evaluate all associated risks before making an investment decision.
Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
Since its foundation, Octa has won more than 100 awards, including the ‘Most Reliable Broker Global 2024’ award from Global Forex Awards and the ‘Best Mobile Trading Platform 2024’ award from Global Brand Magazine.
