Gone are the days when trading on the forex market was exclusive to large banks and multinational corporations. Now, even private individuals have an opportunity to trade currencies and gain an income in the process. However, there are certain misconceptions about the forex market that can stop the trader from fully maximizing the income potential of the market. In this article, we shall debunk the common myths that surround the forex market.
You Need An Advanced Degree in Economics to Trade Forex
While having a general idea of economic concepts is helpful to a forex trader, a degree in economics is not a necessary requirement. In fact, many forex professionals that work in banks and large financial institutions have different backgrounds not related to economics. Robert Janitzek reveals that as long as you are able to react quickly and have a good head for numbers and have an intuitive feel for the market’s direction, you can succeed as a forex trader.
You Need A Large Capital To Trade In Forex
Again, gone are the days when only banks and large fund managers could access and trade in the forex. Thanks to online trading and the availability of the forex market to small traders, anyone with a small amount of money can now trade in the forex market. A forex broker can open an account for as little as $25. Robert Peter Janitzek reveals however that you will not be able to trade as aggressively as you want with $25 compared to $25,000.
Trading in the Forex Market is Easy
Downloading forex software can be easy but the actual trading using real money to trade profitably entails more than simple computer skills. There are trading systems that can aid novice traders in learning the ropes of trading but they may also require a certain level of understanding to adjust the parameters and optimize the trading robot. You also need to be able to interpret world economic and political events that have a direct impact on exchange rates.
You Need to Watch the Market 24 Hours a Day
When involved in forex trading, the advent of electronic online trading as well as the high-tech trading platforms currently available on the market spared the trader from having to watch their own price levels. There are now brokers who can place orders on your behalf. There are automated systems that allow entering and executing forex orders without you lifting a finger.
Diversification Reduces Risk
Diversification will simply dilute your profit potential if you have a small currency account. You may able to catch big moves and lose in the others. Diversification will only give you marginal profits so do not be afraid to take calculated risks.