Myths of Forex Trading
The daily turnover of a forex market can go up to $5 trillion per day, hence it is no doubt that the forex market is the largest market in the world when it comes to the volume of trading. Whether you are an expert or still new to forex trading, there are facts about forex that are sometimes hard to tell whether it is legit or a myth. Today, we are going to look at the most popular myths of forex trading.
First and foremost, you might have heard some people say: “Forex trading is easy, just read a book or two, create an account and you will start making money from forex trading”. Well, that’s definitely a myth because to be able to see profits from your forex investments, it takes time to learn the ins and outs of the market, dos and don’ts in trading, so on and so forth. Since there are many platforms and apps available on the market today, some people may think all they have to do is download the app, and you’re good to go. However, it still needs a definite level of understanding and effort, and perhaps years of trading experience to be successful in forex trading.
The next myth in forex trading would be “As long as you can predict the pattern, you can make money”. However, that turns out to be a myth because predictions and forecasts will cause you to lose sight of what’s actually happening within the market thanks to psychological bias. Studies show that when you are focused on your predictions and forecasts, you will find yourself seeing solely what you envision rather than adapting to the real time events such as local politics that are affecting the market. It is not necessarily a bad thing to predict the future patterns, but it is more important to be quick to react to real time events.
You may also have heard this: “You need a large sum of money in order to trade in the forex market”, which is true to a certain extent in the past where large institutional investors such as banks and multinational corporations used to be the only ones trading in the forex market. However, that has changed over time as the forex market has become more accessible to individual traders through a myriad of forex brokerages (see indonesia forex trading brokers) in the market and also the advancement of technology where you can trade via platforms like mobile apps. Nowadays, you can also start forex trading with a minimal amount of money as low as $25.
Last but not least, another common myth about forex trading is that you can make a lot of money in a short amount of time. There are many short term speculators who invest a lump sum of money in the forex market in hopes of maximizing profits and getting rich in a short amount of time. However, these people usually end up disappointed due to lack of knowledge on the forex market. This is because trading in the forex market is a skill that takes time to hone, even for the trading experts. It also takes a lot of effort to master, not to mention patience and consistency.