Top 10 myths about forex

forexanbu03

Banned
Jul 3, 2020
18
8
9
33
Forex is a market where exchange of one currency with another currency takes place. It’s the market which provides accessibility and liquidity to the traders to buy and sell one foreign currency in exchange of another.

Forex traders seek profit in buying currencies low and selling them high. This kind of trading became more popular with the widespread of the on-line Forex brokers. There is a lot of information available about Forex on the web. However there also many myths surrounding the foreign exchange market:

Forex trading is easy. Many people that want to dive into the world of the foreign exchange market believe that the Forex trading is easy — you just read a book or two and then you will be able to earn daily profits with just 2-3 hours trading daily. Others think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s just a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice.
“I will make money in Forex, if I can trade stocks successfully.” Success in stock market doesn’t imply that you will get success in Forex market — there are many differences between trading stocks and the spot currencies. First of all, Forex market requires a lot of hard work and dedication as this market is open for 24 hours a day. You cannot just sit in front of your computer for the whole day and night, so the best way is that you should find the most suitable time periods for trading. Second, “buy&hold„ strategy simply won’t work in Forex market. Third, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.
“I can make profit whenever I want if Forex market is open 24 hours a day.” Once again, you won’t be sitting in front of your PC for the whole day to be able to trade 24 hours. You’ll have to develop automated trading software to get the advantage of 24 hours a day working schedule.
“I can be a successful Forex trader just following someone else’s signals.” Many beginning traders get burned by the blind signal-following. That’s like putting away the whole responsibility for your actions to someone else. That may sound cool, but in reality you end up with the huge losses. Learn to rely on your own knowledge and skills. Remember that there were no great signal-followers in any financial market.
No commission is to be paid in Forex market. You only have to pay the spread, but you don’t have to pay the commission. And what’s spread? It is the difference between the buy and sell price of the currency pair at the same moment. You may end up with the major part of your profits in the broker’s hands if you plan to rely on the short-term trading.
Forex is a scam. Some skeptics and disappointed traders think that Forex is just some new fad to scam people for their hard earned money. Although there are many scams that are hiding behind the “brand” of Forex, that doesn’t mean that the Forex itself is a scam. There are many institutional Forex brokers, regulated Forex account managers and other solid companies in the market to whom you can trust.
“I need to exactly predict the market outcome to be profitable in Forex.” There is no scientific method to know something in advance in the market with a 100% certainty. There would be no Forex market if you could know the exact currency rates beforehand. Trading is not the game of certainties; it’s a game of odds. One of the first things that new traders learn is to think in the terms of probabilities and risk-to-reward ratios.
“I need to use a very complex strategy to be successful in Forex.” It’s a popular myth, in which many on-line sellers would want you to believe. The main requirement to be successful in Forex is a self-discipline and money management. There are many traders that make consistent profits with rather simple and old strategies.
“I need to have a lot of starting capital to get profit in Forex.” Big capital investment won’t help you in Forex. You don’t need a lot of money to diversify in currencies and you can’t move the currency rates with your trading orders (you’d need billions of dollars to do that). Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.
Forex is gambling because it’s completely random. Although there is no certainty in Forex (as in any financial market) it doesn’t mean that it’s completely random. And it’s certainly not a gambling, since your success in this market depends mostly on your skills and experience, not on your luck.
Knowledge is power — so it’s better for you to learn distinguishing some stereotypical myths from the real thing. Don’t fall for the promises of getting some easy profits in Forex, but don’t be afraid of the market just because some people think it’s not possible to earn there. Be rational — this quality will help you either if you are going to trade in Forex or not.
 
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Day

Trader
Jul 25, 2020
18
1
7
33
Here is another one which you have forgot to mention – you can get rich swiftly by trading on this market. I think that there is also another thread here on forum on this topic. This is a nonsense frequently used to promote forex trading.
 
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darrensammy

Banned
Jul 21, 2020
32
8
19
29
The myth that forex is a scam is very common and many people believe in it and restrict themselves from trading in the market. Forex is neither a scam nor gambling and if you are trading properly, you can be profited from it.
 
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jimcarter

Trader
Nov 10, 2017
34
4
24
38
USA
Below are some of the most common myths about forex trading, which will be helpful for those who are thinking about trying their hand at currency trading.
  • Forex trading is easy
  • You need a degree in economics to trade forex
  • You need to predict what is going to happen to make money in forex
  • You need a large sum of money to trade in the forex market
  • You need to watch the market 24 hours a day to be successful
  • Being unconventional improves your chances of success
  • The higher the leverage, the better
  • You can get rich quickly in forex
  • The more complex the strategy, the better
  • The market is rigged
 

peterpies

Trader
Mar 18, 2019
27
3
14
48
95% of traders lose.

Even though ESMA rules have made regulated brokers clearly state the percentage of traders that lose is between 60%/80%, depending on the broker.
 

sharabela

Master Trader
Oct 19, 2016
133
7
54
43
Yes, these are the common myths. Many of us take Forex as a money making scheme. We forget that Forex is the most toughest way to make easy money. We must be patient with learning and give ourselves enough time to be able to deal with this extremely happening market.
 
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e_abrams

Active Trader
Dec 11, 2020
451
31
39
39
I think the responsibility for this myth falls more on the brokers than on the individual traders. A lot of brokers are very unethical about their promises to traders, especially newbies.
 

danielbro

Trader
Nov 26, 2020
60
11
9
40
Here is another one which you have forgot to mention – you can get rich swiftly by trading on this market. I think that there is also another thread here on forum on this topic. This is a nonsense frequently used to promote forex trading.
This! It is no surprise that people are making losses in trade thinking that they can become by trading. Sad reality hit them harder than they'd expected
 

e_abrams

Active Trader
Dec 11, 2020
451
31
39
39
True. People who go into trading thinking they'd be making big profits soon are usually in for a very rude and painful awakening.
 

HeavenLeighGill

Active Trader
Aug 5, 2021
299
22
34
27
You mentioned several myths that my friends and family personally asked me about once I told them that I had opened a trading account. Getting rich quick is another one, as several of them asked me to show them how to do it but quickly became disinterested when I explained how much there actually is to know.
 

JoshEvansFX

Trader
Jul 7, 2021
52
4
19
29
Forex is a market where exchange of one currency with another currency takes place. It’s the market which provides accessibility and liquidity to the traders to buy and sell one foreign currency in exchange of another.

Forex traders seek profit in buying currencies low and selling them high. This kind of trading became more popular with the widespread of the on-line Forex brokers. There is a lot of information available about Forex on the web. However there also many myths surrounding the foreign exchange market:

Forex trading is easy. Many people that want to dive into the world of the foreign exchange market believe that the Forex trading is easy — you just read a book or two and then you will be able to earn daily profits with just 2-3 hours trading daily. Others think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s just a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice.
“I will make money in Forex, if I can trade stocks successfully.” Success in stock market doesn’t imply that you will get success in Forex market — there are many differences between trading stocks and the spot currencies. First of all, Forex market requires a lot of hard work and dedication as this market is open for 24 hours a day. You cannot just sit in front of your computer for the whole day and night, so the best way is that you should find the most suitable time periods for trading. Second, “buy&hold„ strategy simply won’t work in Forex market. Third, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.
“I can make profit whenever I want if Forex market is open 24 hours a day.” Once again, you won’t be sitting in front of your PC for the whole day to be able to trade 24 hours. You’ll have to develop automated trading software to get the advantage of 24 hours a day working schedule.
“I can be a successful Forex trader just following someone else’s signals.” Many beginning traders get burned by the blind signal-following. That’s like putting away the whole responsibility for your actions to someone else. That may sound cool, but in reality you end up with the huge losses. Learn to rely on your own knowledge and skills. Remember that there were no great signal-followers in any financial market.
No commission is to be paid in Forex market. You only have to pay the spread, but you don’t have to pay the commission. And what’s spread? It is the difference between the buy and sell price of the currency pair at the same moment. You may end up with the major part of your profits in the broker’s hands if you plan to rely on the short-term trading.
Forex is a scam. Some skeptics and disappointed traders think that Forex is just some new fad to scam people for their hard earned money. Although there are many scams that are hiding behind the “brand” of Forex, that doesn’t mean that the Forex itself is a scam. There are many institutional Forex brokers, regulated Forex account managers and other solid companies in the market to whom you can trust.
“I need to exactly predict the market outcome to be profitable in Forex.” There is no scientific method to know something in advance in the market with a 100% certainty. There would be no Forex market if you could know the exact currency rates beforehand. Trading is not the game of certainties; it’s a game of odds. One of the first things that new traders learn is to think in the terms of probabilities and risk-to-reward ratios.
“I need to use a very complex strategy to be successful in Forex.” It’s a popular myth, in which many on-line sellers would want you to believe. The main requirement to be successful in Forex is a self-discipline and money management. There are many traders that make consistent profits with rather simple and old strategies.
“I need to have a lot of starting capital to get profit in Forex.” Big capital investment won’t help you in Forex. You don’t need a lot of money to diversify in currencies and you can’t move the currency rates with your trading orders (you’d need billions of dollars to do that). Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.
Forex is gambling because it’s completely random. Although there is no certainty in Forex (as in any financial market) it doesn’t mean that it’s completely random. And it’s certainly not a gambling, since your success in this market depends mostly on your skills and experience, not on your luck.
Knowledge is power — so it’s better for you to learn distinguishing some stereotypical myths from the real thing. Don’t fall for the promises of getting some easy profits in Forex, but don’t be afraid of the market just because some people think it’s not possible to earn there. Be rational — this quality will help you either if you are going to trade in Forex or not.
Spot on this mate - thanks for taking the time for typing this up.
 

no_frame

Trader
Aug 21, 2021
44
2
9
31
Here is another one which you have forgot to mention – you can get rich swiftly by trading on this market. I think that there is also another thread here on forum on this topic. This is a nonsense frequently used to promote forex trading.
One of the most common myths I have ever come across.
 

e_abrams

Active Trader
Dec 11, 2020
451
31
39
39
Very well put my man.
The get rich quick really bugs me and is the curse of new traders whom have potential but end up trading out of greed
Frankly, whenever I see anyone toting this myth I immediately conclude they are either shady or terribly ignorant because I know it's not true.
 

rickfx

Trader
Nov 9, 2020
20
2
17
42
  • The market is rigged
This is the funniest for me.
Some people trade micro lots and then complain the brokers for hitting their stop losses on purpose. Come on multi-million companies will care about a few cents?
I understand it's much easier to blame the others.
 

e_abrams

Active Trader
Dec 11, 2020
451
31
39
39
The market is not rigged, I think, it's just massively influenced by big institutional traders, and small retail ones must always engage in it with that thought in mind.
 

reecerispoli1

Trader
Sep 22, 2020
69
6
19
29
The myth that forex is a scam is very common and many people believe in it and restrict themselves from trading in the market. Forex is neither a scam nor gambling and if you are trading properly, you can be profited from it.
Yes totally but as there’s so many scammers out there that’s where they get in to trouble especially when there told they can make thousands in 24 hours
 

e_abrams

Active Trader
Dec 11, 2020
451
31
39
39
I have been asked too, and I try to take the time to explain that it is not, although it can be quite risky. Forex is a matter of knowledge and analysis, not chance.