Top 10 Forex Myths
Forex traders strive to profit from buying currencies at low prices and selling at a higher price. This type of trade has become popular, especially after the widespread spread of Forex brokers on the Internet. There is a lot of information available on Forex on the Internet. But there are also many myths that surround and surround the Forex market:
Forex trading is easy. Many people who want to dive into the world of foreign exchange market believe that Forex trading is easy – it only takes a book or two to read and then you are able to earn daily profits by spending 2-3 hours in daily trading. Others believe that they can buy a profitable strategy, which would make them rich from Forex trading. This is actually just a legend. Success in Forex is not easier than mastering any other profession – it takes time, money and a lot of practice.
“I will earn money from Forex if I can trade stocks successfully.” Success in the stock market does not mean, by extension, that you will succeed in the Forex market – there are many differences between trading stocks and spot currencies. First of all, the Forex market requires a lot of hard work and dedication because this market is open 24 hours a day. You cannot just sit in front of your computer for a whole day, so the best way is to find suitable time periods for trading. Second, the strategy, “buy & hold” will be of no use in the Forex market. Third, you do not have as much information about currencies as you can get from reports and company statistics.
“I can make profits whenever I want as long as the Forex market is open 24 hours a day.” “Again, you will not be sitting in front of the computer for a full day to be able to trade 24 hours. You must develop automated trading software to get the advantage of working 24 hours a day.
“I can only be a successful Forex trader by tracking someone else’s signals.” Many novice traders burn out blindly by following the signal. This is like putting full responsibility for your actions on someone else’s shoulder. It may sound good, but ultimately ends in heavy loss. Learn to rely on your knowledge and skills. Remember that there are no great adherents to the trading badge in any financial market.
There is no commission to be paid on the Forex market. You only have to pay the price difference, and you do not have to pay a commission. And what is the price difference? Is it the difference between the purchase price and the selling price of the currency pair at the same moment? The bulk of your profits might end up in the hands of the broker if you plan to rely on short-term trading.
Forex scam. Some frustrated skeptics and traders believe Forex is just a new fad to trick people into making money. Although there are many tricks hiding behind a “brand” of forex, this does not mean that forex is in itself a scam. There are many Forex brokerage firms, Forex account managers who are certified by official and solid market trading companies that can be trusted.
“I need to predict exactly the market outcomes to be a winner in Forex.” There is no scientific way to know something beforehand in the market with a 100% certainty. Otherwise, there will be no forex market if you can know the exact prices of currencies in advance. Trading is not a game of certainty. It is an odd game. The first thing new traders learn is thinking about dealing with the possibilities and risk ratios compared to the reward.
“I need to use a very complex strategy in order to succeed in Forex.” It is a famous legend, many online sellers push you to believe it. The main condition for being successful in Forex is self-discipline and money management. There are many merchants who make profits that are consistent with fairly simple and outdated strategies.
“I need a lot of capital to start getting profit in Forex.” A large capital investment will not help you. You do not need much money to diversify currencies and currency rates cannot move according to your trading orders (you will need billions of dollars to do so). In fact, you can trade with very little capital, because Forex trading depends on the leverage of the broker.
Forex betting because it is a completely random process. Although there is no certainty in Forex (as in any financial market) this does not mean that it is completely random. And it’s definitely not a gamble, your success in this market depends mostly on your skills and experience, not your luck.
Knowledge is power – so it is best for you to learn to distinguish some stereotypical myths from the real thing. Do not fall into the illusions of promising to get some easy profit in Forex, but do not be afraid of the market just because some believe that it is not possible to profit in Forex. Be rational – this trait will help you whether or not you trade in Forex.