Myths, rumors and legends are everywhere. The
forex market is not immune to them. The new forex trader is likely to be
inundated with a number of forex myths, legends and downright
falsehoods, so it’s important to separate fact from fiction before your money
leaves your hands. Here is a list of just a few:
Myth #1 – Forex can make you rich quick
Think about forex as a journey, and not a destination.
There is no final winning trade; no huge gains; no trade of the century.
Advanced strategies like margin trading, options, and futures, require a great
deal of analysis. Traders make money in the forex market by analyzing trends
and making smart decisions. The gain on each trade is a small step in the
direction of his or her long-term goals.
Myth #2 – The forex market is rigged
Sometimes you might hear a trader complaining that
the market is against them. Every trade they make is a losing one. They blame
the broker, the interbank, the government, the timing. The truth is this:
foreign exchange rates change often and are too volatile to be rigged. Forex trading is not for the faint-hearted.
Blaming everyone but yourself for bad trades will prevent you from learning and
growing as a trader. The only person responsible for your poor trade
performance is you.
Myth #3 - The
markets move in a predictable, scientific way
The junk emails you get from companies
trying to sell their guaranteed, scientific formulas are just that – junk. Anyone who tries to tell you that they have the market
cornered with forex predictions or a single formula is just as crazy as those
people who tell you that you can win the lottery by scientific method. Try
doing some paper trading (simulated, such as with a demo) and find the pattern.
It’s not there.
Myth #4 – The experts know best (experts always win)
This is probably the most enduring myth. Tons of ‘experts’ abound
with advice for the new trader, based on years of experience. News flash: Even
the world’s best traders are right only about half of the time. Think
about it – a trader can literally be a loser 50 percent of the time and
still be considered an expert
in forex.
Avoiding these and many other myths that pervade
forex market blogs and Articles will help you keep your forex
investment under your control.
Forextips.com is committed to educating the forex
trader in all aspects of foreign currency trading. Click hereto get information on a free forex webinar to help
you maximize your success in the forex market.
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