Some genealogists throw out an entire family tradition. While stories passed down from generation to generation may be exgaggerated and Grandpa's own personal tall tale, there may be an iota of truth to the story. The difficulty is finding out that truth.
An ancestor's grand story of military service may really be that he was a private.
A relative living on the castle grounds may turn out to be one who lived within sight of the castle.
Include family traditions in your genealogy, but clearly label them as tradition. Even the tall tales tell something about your family. And look at the tradition closely. Could there be a nugget of truth hiding under tons of dirt?