Currently, there are many myths about forex trading. These myths are mostly held by people who have never attempted to trade and know nothing about forex trading. Majority of these myths are meant to either lure or scare people from forex trading. The most unfortunate thing is that most aspiring forex traders believe in these myths. Forex myths can greatly affect the way you trade. So knowing them can help save you from unnecessary frustration. If you are interested to become a successful forex trader then, it is very important to know the truth about forex trading so that you don’t get disappointed if things don’t work out as you had thought. In this article, we are going to tell you the myths and truth about forex trading.
Myth: 1. Forex trading is simple
One of the most popular myths about forex trading that many novice traders believe is that forex trading is very simple. However, that is far from the truth. Just like any other form of trading, forex trading has its own shares of challenges. The reason why most newbies usually quit trading after a few attempts are because they usually get disappointed when they are hard hit with reality. Trading on the Forex market is not as easy as many people think. There are plenty of things that the trader need to master in order to make good money from forex trading. Some of these things include understanding the market, knowing how to correctly use trading tools, knowing the best currency pair to trade and at what time among many others. You cannot master all these techniques in a single day. It actually takes time to master all tricks used in forex trading. The plain truth about forex trading is that is not that simple. It requires proper learning and practice in order to become a successful forex trader.
Myth 2. You need to have a lot of money in order to trade forex
Most newbies believe that they need to have a lot of money in order to trade forex. Although that used to be the case in the past, advance in technology has now made it possible for any person regardless of their social status to trade forex. A long time ago, forex trading was only accessible to banks, large corporations and few wealthy people in the society who could trade over $1,000,000. However, things changed when online forex brokers came into play. Nowadays, it is possible to trade forex while sitting at the comfort of your house. All that you need is a computer and access to a reliable internet connection. The truth is that you don’t need a lot of money in order to become a successful trader. In fact, most beginners who invest a lot of money at the initial stage of trading usually end up regretting. Even if you are loaded with a lot of cash, it is prudent to start small that increase the amount as you gain more trading experience.
Related: How to Start Forex Trading with $100
Myth 3. You must know what is going to happen in the market in order to make money
This another popular misconception about forex trading. Most newbies are meant to believe that they must be able to accurately predict when it going to happen in the forex market in order to money. However, that is not true. Even the most experienced forex traders don’t know what is going to happen in the forex market in the next one hour. One thing about forex trading is that it is highly unpredictable. Things keep changing by the minute. Regardless of which trading tools you use or your level of experience, the truth is that you will never know for sure what will happen in the market in the future. Therefore, when placing your trades, you must be realistic enough to know that you can win or lose your trades.
Myth 4. Forex trading is just like gambling
This myth not only affects forex but also affects other forms of trading such as future, bonds, and stocks. The truth is that forex is not gambling. In fact, traders who approach forex trading with gambling mentality usually don’t go far. If forex was indeed a gamble, then experienced traders would not care to study the market before placing their trades. Instead, they would depend on guesswork and emotions. Forex market deals with the structure, behavior as well as the overall performance of nationals and regional economies and how they relate with each other. The reason why most successful traders usually study the market and create a trading plan is because they clearly know that forex trading is not gambling.
Myth 5. You need a finance or economics degree in order to become a successful forex trader
If you do your research well then you will find out that most successful forex traders don’t have economics or finance degrees. You don’t have to understand all financial or economic terms in order to become a successful trader. Anybody including those who don’t have economic or financial background can trade on the forex market. All that is needed is the willingness to learn, knowing how to use various trading tools and being able to keep track of what is happening in the forex market.
Myth 6. Forex trading can make you super rich overnight
Most novice traders usually believe that they will sort out all their financial problem when they venture into forex trading. However, that is not true. Forex trading is not a get rich quickly platform. If you venture into forex trading with a mentality that you will get rich overnight, then you will get disappointed. In fact, you may end up losing more. Even the most successful forex trader will tell you that it took them time to master forex trading tricks. The truth about forex trading is that it will not make you rich overnight. The only way to succeed in forex trading is through practice, consistency, and patience.
Myth 7. You can only succeed if you use automated trading robots
Some people believe that they can only succeed in forex trading if they use an automated robot. However, that is not true. In fact, if you do your research well, then you will find out that most successful forex traders don’t use automated robots. This myth is mainly propagated by computer programmers who are only interested to make money from unsuspecting traders. The truth is that automated trading robots, no matter how good they may look cannot give you the success that you are looking for in forex trading. In fact, most traders who have used them have admitted that they ended up making more losses than profits. Forex trading is very unpredictable and only an experienced and skilled human mind can make the right decision on when to trade and when not to trade. If trading was as simple as installing software on your computer and allowing it to trade on your behalf, then everybody would be a billionaire by now. The truth is that automated robots don’t work. If you want to be successful in forex trading, then you must be ready to use your mind when making trading decisions.
Myth 8. Forex market is rigged
This is a myth propagated by traders who have made consistent losses from their trades. It is normal to complain and even get frustrated when you constantly lose your trades. However, just because you have made bad trades does not mean that forex trading is rigged or all forex brokers are corrupt. The truth about the forex market is that it is highly volatile and liquid hake difficult to be rigged. Instead of complaining that the forex market is rigged when you lose your trades, sit down and restructure your trading strategies.
Myth 9. You need complex trading strategies in order to succeed
Some forex traders have been meant to believe that they can only succeed in forex trading if they formulate complex trading strategies. Using complex strategies does not necessarily mean that all your trades will be successful. In fact, most traders who use complex strategies usually end up losing most of their trades. Forex trading is not complex. If you use complex strategies, then you will most likely get confused because you are thinking too much. Successful traders often use simple, but well-thought strategies.
Myth 10. You need to be glued to your computer 24 hours a day in order to be successful
One amazing feature of the forex market is that it operates 24 hours’ day. This means that traders can trade both during the day and night. However, there is a common misconception that traders have to spend all their time on their computer watching what is happening in the forex market in order to be successful. However, that is not true. Although forex trading requires a lot of commitment from your side, you don’t need to spend all your time on your computer in order to win your trades. You only need to come up with a plan that works for you. For instance, if your ideal time to trade is during the night, then you can spare some time and trade at night trade then do other constructive things during the day. Most successful traders don’t spend all of their time on the computer. Instead, they know the best time to trade.