Forex trading, the exchange of foreign currencies, has become extremely
approachable and therefore popular especially in the online sphere. This
growing popularity led to a plethora of online Forex brokers,
lessons and sometimes misleading information. Here we will review and refute
the most common and confusing myths that surround the Forex market:
Forex is a type of Gambling
Though trading Forex may be risky, but the risk derives from the
changing markets and not from the odds set by the house. Trades who understand Forex market movers and drives can maximize their profits and minimize their
risks and losses.
Trading Forex is Easy
Not all Forex myths describe foreign exchange trading in dark tones;
some of the myths are too positive to be true. Trading Forex isn’t easy as it
requires thorough study of Forex charts and analysis types, understanding of
economic indicators and market movements, and of course experience, self
discipline and motivation are helpful as well.
Stock Trading is like Forex Trading
Many traders tend to believe that a successful experience in stock
trading will guarantee and immediate success trading Forex. The truth is that
there are many differences between the two financial markets. For example,
stocks usually rise over the long term while currencies are usually traded
within a price channel. (Just imagine the global economy if currencies would go
only on one direction…)
Forex brokers take zero commissions
This myth has some base in reality ad most Forex brokers don’t take
commissions in the common definition of the word; but the make money on your
bid/ask spread instead. (You don’t expect them to work for free do you?)
Trading Demo Accounts indicates your future success as Forex trader
Though demo accounts are great practice tools for newbie Forex traders,
your success trading “fake” money won’t necessarily provide an
accurate indication of how well you will success trading your actual money. The
significant psychological difference between trading with “pretend” money
and trading for real makes all the difference.
We hope that the revelation of these Forex myths will help you better understand the Forex market and the way it operates. You can make money trading Forex, but not necessarily by trusting those who promise fast and easy profits.