Perception vs. reality

Think about this scenario: you're on a flight, and as the plane takes off or lands, it starts shaking a lot. Your heart races, and you feel like you might not make it. But once you land, you get out and hop in your car. You navigate through the busy streets and traffic, never once worrying about a potential car crash. Statistically, though, your odds of dying in a car accident are way higher than in a plane. Yet, we tend to fear flying more than driving. It's funny how our minds react to things that seem safe compared to those that are clearly riskier. This whole mindset shows up in trading too. A lot of folks hear about others making big bucks from trading and think it's a safe bet. But in reality, trading carries way more risk than just investing for the long haul. Still, many people view trading as the safer option, and that mindset can often lead to losing money.

You are right but the plane and car accidents that you used is not a good example that should be used. There is a higher chance to have a car accident than to have a plane accident, but there is a far higher chance to die in a plane crash than to die in a car accident. There are still car accidents that people still survive, but plane crash survivors chace is low to none. But you are right that holding bitcoin is better than trading it.

There is a point in your words. You are right that the chances of dying in a plane crash are much higher than in a car crash. But I also want to make you think that plane crashes basically do not happen regularly. I do not know the exact truth, but as an example, we hear about 1 or less plane crashes in every 1000 flights. But car crashes are happening all the time somewhere in the world. And people are dying every day somewhere in the world in AU accidents. Especially in underdeveloped or developing countries where the roads are very bad. If you try to find out by searching on Google, you will see that statistically the rate of car accidents on the road is a thousand times higher than that of plane crashes. But finally, what you are saying is also absolutely true. In a plane crash, almost all the passengers on the plane are more likely to die. But in most cases, there is a chance of survival in a car accident.

It's because we mostly use cars in daily basis and not airplanes, and that's why the risk is higher with the daily usage of it. I agree, trading is riskier than long term investment. In plain sight, you're seeing to simple one activity and that's to be consistent in accumulation. Because they're blinded by the social media people that trading is easy and profitable.

His mindset will gradually change. Perhaps for beginners, trading seems easy to make a profit, but they do not know that the process of becoming a trader who can generate profits is not easy. When they are finally truly able to trade and earn profits, I believe all their thoughts will change. Trading is indeed much riskier than long-term investing. But you can do it when you are capable. Trading is to make small profits in a short time, whereas larger profits can be obtained from long-term investments.

No, people trade not because they think it is safe but more because of the profits they can get, as you mentioned, they are tempted by other people's stories but not because it is safe but because of the profits. However, I agree that investing is safer, and it provides more peace of mind because you only need to save properly and in the long term, you will enjoy the results if the assets are good.

I find trading more riskier than long term investment. I dont know, why some believed that but ofcourse thats different point of view. We are the same OP, Id believed on trading as riskier, cause the ability to loss funds there is much higher compared to long term which you can relax on the bright side when the market is down or up. I think our body can reacts to these kind of adrenaline as this is more of natural on us like the plane situation.

This kind of thing only come from ignorance, if someone care to read about the real data they will easily figure out that trading is riskier. Don't need to take genius to google the statistic of profitable trader and losers. But even with that delusional mindset, they will eventually realize they are wrong when the reality hits hard, such as getting liquidated. Smart people would do a research before even trying to trade. They will see if their expectation is realistic and match it with the available data.

The problem is that many influencers market it that way. I think they fall into two categories: those who sell trading as a sure-fire way to make money because they earn more from selling courses than from trading itself, and those who do so because trading firms pay them to promote it. Or a combination of both. I’ve said that time and time again. The problem is that trading is exciting, whereas the long term is routine and boring. But if you dollar-cost average into good financial assets, you’re bound to make money; the longer the time horizon, the more certain it is that you’ll make a profit. Trading, on the other hand, can yield huge short-term profits, but you’ll keep trading, and the longer you do it, the more certain it is that you’ll end up losing. The average Joe, with limited capital and limited resources—and even more so if he uses leverage—stands no chance against the high-frequency trading (HTF) algorithms or the AI used by investment funds with vast capital.

We should manage our mindset and ready with anything so we will not panic if the reality far from our expectation. Many traders lose control and are not ready with the reality especially when the market down a lot and boom they disappointed and even some of them stress with their losses. If we can thinks clear and realize that the reality can be far from our expectation, we will not fear with that but prepare ourselves for anything happens.

Even with evidentiary data available, the wisest choice is to trade while also holding unto a long term plan portfolio. That's the way I see it, because trading requires an ample amount of focus and a load of risk management knowledge to be able to scale the high and lows of it and the reason why diversification exist is to know how to seclude trading activities from holding portfolio so as to not be in total loss when the market goes awry.

Both trading and long-term investment are actually risky especially if you trade or invest blindly. But the risk level differs. There is higher risk with trading because you are trading in such an unpredictable market that creates unpredictable outcome, unlike with long-term investing where it prioritizes compounding growth and allow time for investments to recover from downturns. However, a good trader can eventually minimize the risk in trading, through learning from the past mistakes and losses, and learning from the experiences of reliable traders in the market.

I don't really get the comparison of cars vs plane crash here. Anyway people assume trading is simple but what they don't realize is there are millions of others out there doing the same so finding the right entry and exit points is gonna be hell lot harder than you thought and you still somehow made profits in the beginning the forced you to think that trading is very easy. It is impossible to stay consistent with profits from trading so anyone who is looking for a steady source of income then trading is not really a best option.

I get what you're point is but in my perspective we don't usually think it's dangerous or risky if we constantly doing it for instance you commute on cars more than on plane and in trading you trade daily compared to investing which we only done every once in a while and we invest big and we thought that it has bigger risk. Well, I'm not sure if you get what I mean but I definitely get what you've said and I think it's really hard sometimes our mind hinders the reality and sometimes it's hard to accept what really is the reality and still believe on what we think are right.

Being tempted by others stories is not a bad thing, there are many good cases where people got inspired and did something great. Many people in the world saw what others have done and they have then did a better version themselves. It's the mistaken way of getting inspired that is resulting in bad situations. Seeing some businessman getting rich, so wanting to have your own business is not bad, seeing some influencer on twitter making a yolo x100 leverage trade and making money is not something you should aspire to.

Traders who thinks it's all easy to make profit have not started trading yet because through the learning process alone they will be made to understand that real trading is different from using a demo account and when they have graduated from learning to becoming real traders the idea of profit making always will be reduced because huge profits are not easy to get but if you are a long term investor with time you could land yourself a very good profit compared to the one you make in trading.

Historically, even planes are not safe and even a small minor accident have turned out to be fatal for hundreds of people. That is the reason why people always have a bit fear in mind while enjoying their sky time. even minute turbulence while cruising up above 10,000ft can cause panic among the passengers. This is pretty much normal when it comes to human as their brain fears for things which have happened in the past. People have seen planes crashing down in oceans or on buildings which has created that fear between these people. When it comes to trading, the fear is not about life but about our wealth. Brain functions entirely different in both scenarios. In trading, our brain will tend to become greedier which might end up in us taking impulsive decisions.

Yes, regardless of the example, the meaning is clear: long-term investing is much safer than day trading, yet the majority prefer day trading or scalping to long-term trading. The reason, in my opinion, is that most people love quick profits and cannot wait months or years to get their profits, even though trading involves a great risk and most of the time there are large losses, but despite that they do not stop because they think that they will get a big winning deal that will compensate for their losses.

Yea, people loves quick profit and cannot wait for long but they end up losing their funds quickly to the market instead of the quick profit they seek. I have sat down and thought about trading and long-term investment, those after quick profit are the ones losing because the market is volatile and cannot be predicted correctly which is a big disadvantage to traders. Long term investment is boring but a good way to preserve your funds and make profit in future. Investment isn't built in a week. It takes a very long time to build and grow it to a significant size.

But many times the problem is not in the mindset, but in setting expectations. If people initially think that everything will always be as planned, then their minds stop working even if the reality is a little different. Therefore if you think about the worst case scenario in advance, the shock is less, In reality many traders seem to be fine during the profit period but when a big drop comes, they suddenly change their decision, Because they were not mentally prepared for that situation, Therefore it is more useful to assume the worst case in advance than to remain calm.