Surfing on the Internet you can see a lot of offers to earn on Forex. Most of these ads tell us how easy is making money trading in the foreign exchange market. Having seen such a tempting advertisements, many people are rushing to become traders dreaming of fast and easy profit.
Financial markets have become extremely popular, the number of Forex myths covered it is growing. I repeatedly met various statements regarding earnings on the Internet too. Today I want to tell you about the most common Forex myths and misconceptions.
Forex myths: what is true and what is not?
#1 – Forex is a get-rich-quick scheme
Making money on the Internet is easy as one-two-three! It was the statement I came across the web as soon as I decided to become a trader. Sounds good to be true. Traders who succeeded on Forex will tell you that trading takes a time and experience to master, but certainly, it is not a get-rich-quick scheme. If it was possible to grow the account from $500 to $1 million in several months everybody would do it, wasn`t it?
The way to a professional trader is not close, but achievable!
#2 – To trade on Forex you need a huge initial capital
If earlier the foreign exchange market was opened only to large financial institutions, today everyone can try Forex trading. In order to start trading, you don’t need to be a large financial organization or Rockefeller, you can trade even with $10 on deposit. It is possible due to the financial leverage.
#3 – Demo trading prepares me for live trading
Demo accounts are great for getting to know how the trading platform works, learning basic trading concepts as well as testing a trading system. I do not recommend staying on demo accounts too long. It’s better to practice for a while and go to real trading. Cause there are no emotions when you trade with virtual money. And it is one of the main obstacles of the trader. The trader does not feel a real risk of losing real money.
#4 – Copying trading manners is the key to profitable trading
Many novices think that if they will follow the actions of successful traders, they will quickly succeed and get rich. But even if a successful trader has a really effective strategy, this does not mean that it will work for you. You should develop your own skills, assess the situation on your own, and don’t entirely rely on others.
#5 – The more complex the strategy, the more indicators are used, the more efficient trading
Traders are used to thinking that the more complicated the strategy is, the better results they can obtain. They believe that the more indicators they insert, the more accurate entry points they will find. But it is not usually the case. If you add a lot of tools, indicators, they just would get you confused. It will be difficult to straighten out the mess of indicators.
#6 – It is impossible to combine trading with work
Another popular Forex myth: a trader must sit at the monitor around-the-clock. Partly this misconception appears because of short-term trading. But, if you’re not a scalper, it’s not necessary to spend 24 hours at the monitor and stare at the charts every second. Moreover, it does not guarantee you profitable trades.
Many traders have regular jobs, which take most of their time. Forex is open 24 hours a day and they allocate a time from their daily schedules for trading and trade when convenient. In addition, the trader is not tied to the location, he can trade anywhere.
#7 – When a trader is having a rest, the profit is doing its best
There are a lot of offers on the Internet suggesting robots and expert advisers. They promise that the robot will trade profitably, while you do not have to do anything, just download or buy the robot, set it into the terminal and watch how he earns. An attractive description does not guarantee that the robot is really efficient and bring you the long-expected profit.
If you know such programming languages as MQL4 or MQL5, you can write a robot on your own, taking into account the technical and personal psychological aspects of your trading.
#8 – News trading can bring a stable profit
Trading on the news is one of the most popular strategies among traders. News traders open orders during the important news releases and to earn on the growing volatility. It seems to be easy. Nevertheless, there are certain risks. It is necessary to understand that during the news releases the market can behave very unpredictably. At the same time, slippages and requotes may occur before the publication of the news.
I have also heard the opinion that the more trades, the better. You should understand that your profit depends not on the number of transactions, but on the discipline, the competent strategy, as well as on the risk and money management.
Such misconceptions confuse a lot of people and they begin thinking about whether it is worth to start trading. So, learn to distinguish truth and Forex myths, do not form your opinion from other people’s stories.