There are many misconceptions about forex trading. Seasoned traders or just a beginner, these misconceptions can have a huge effect on your trading. Knowledge of some of these myths can help avoid unnecessary frustrations.
Get Rich Quick
For some people, forex is their channel to getting rich quickly or with little effort. However, it takes patience to earn some profit. Trading does not involve any time gap. Forex requires consistency and not a gamble where you risk everything.
Forex Is Just For Short-Term Traders
The popularity of short term trading has been attributed to its high leverage. But this should not be the case all the time. Robert Janitzek reveals that while driven by fundamental factors, long-term currency trends are tradable. Taking the long term approach can help reduce the amount of paid spreads.
The Market Is Rigged
Losing traders often blame a rigged market or corrupt broker as the cause of their failure. Forex is not a scam. In fact, it is the largest market in the world with hundreds of thousands transactions and thousands of inputs daily. Look for signals before investing your money.
You Can Be Right Every Time
Acknowledge that losses are part of trading and that you cannot be right every time. Robert Peter Janitzek explains that by accepting your losses, you can look for a strategy that will give you a slight edge in the market conditions and bring positive returns.
The More Pairs You Trade The Better
Some traders have the misconception that trading 10 times a day will make them earn 10 times as much, which is not the case. It is best to trade less and focus on a few currency pairs. You will benefit more from being patient and waiting for the best opportunity.
Predicting the Market Is How to Make Money
Predicting the market can result to failure. When trading in the forex market, you should follow a system and accept the losing trades with the winning ones. It should be the market that should dictate the trades that are being made. You are better off waiting for the movement of the currency to confirm that the prediction is right.
The More Complex the Strategy the Better
When traders see that their simple strategy yields a small return, they make the assumption that by making changes in their system and taking into account a few more variables, they will yield higher returns.
Knowing these misconceptions will help you make the necessary adjustments and become successful in the foreign exchange market.