MYTHS IN FOREX TRADING
- Section: Forex trading is gambling
- Section: Forex trading is not safe
- Section: I need a lot of money to start forex trading
- Section: Forex trading will make me rich fast
- Section: You’ll be up in the morning and down in the evening.
Hello & Welcome to this Blog. If you are new to Forex trading, you might have read a lot of articles that direct you on the general things to do. These are not all myths! Some of them are true and may help you in the long run. However, You will certainly find out that there is a collection of myths and misinformation being circulated on the internet about forex trading. It’s very important to take such posts with a grain of salt.
You see, forex trading is the largest financial market that exists outside of the physical world, and much like any other market, it’s subject to myths and misconceptions. So, If you’re interested in learning more about forex, let us find out what are the most important of them and try to check their validity.
FOREX TRADING IS GAMBLING
This is a common myth that often comes up when someone with no knowledge of forex trading tries it out for the first time and loses money quickly. The truth is that while there are indeed risks involved in any kind of investment, it’s possible to control them by following a few simple steps that seasoned traders have used for years.
Unlike casinos, forex trading places are regulated by governments, who require traders to be licensed and/or registered. This means there is less of a chance for fraud or manipulation in these markets than in a casino. Plus, since forex doesn’t take place in a physical location, there are no live dealers or other players to distract you from your goal of making money. Also, In forex, if you lose all of your money on one trade, that’s it you can’t borrow more money to keep going. Gambling will let you keep playing with borrowed money until you run out of cash or luck. It is important to note that is a mechanism set in Forex Trading to ensure traders do not lose all their money such as Stop losses to minimize the risk in trades.
FOREX TRADING IS NOT SAFE
This myth is not true. But, it doesn’t mean you should ignore the fact that trading bears the risk of losing money. Trading currencies sounds like a fun way to make money, but it needs to be treated strategically to avoid unsafe ways of making money. When you trade, you can lose all of your money in the blink of an eye. There are however certain risk parameters to put into place to ensure that you can avoid losing your capital.
It’s not safe to have your money in the bank, the bank could go under and you might not get your money back. It’s not safe to have it under your mattress, your house could be on fire (not hoping so, but it is possible) It’s not safe to leave the door unlocked when you go out of the house. That doesn’t mean you shouldn’t do it!. Once you know what you’re doing, forex trading can be safer than putting your money in the bank or hiding it under your mattress. That’s because Forex brokers are regulated by different agencies than banks—and they’re required to have certain levels of insurance for customer accounts and assets. The most important thing is to choose an honest broker and read the fine print so you understand what kind of insurance coverage your account gets, whether it’s from the broker or a third party.
I NEED A LOT OF MONEY TO START IN FOREX TRADING
Lots of people think that they need a lot of money to start forex trading, but it’s just not true. You don’t need a lot of money to start in forex – even if you’re a complete newbie. You can open an account for as little as $100. That’s, just it.
You can use leverage to trade with a small amount of your capital. This means you can control positions worth far more than your funds. You only have to put up a fraction of the total value of the trade, and the rest is funded by your broker. This way you can start being profitable with small amounts of money while building the size of your trading account.
FOREX TRADING WILL MAKE ME RICH FAST
Again, most people believe that Forex trading will make them rich fast, but this is not true. But to be rich quick, you need to either; Be born into a wealthy family, have a lot of money from other means such as inheritance or winning a lottery – and we discussed that Forex is not Gambling or lottery, or you can have a lot of time and patience and make smart investments and never lose money on your trades. Then you will be rich fast. But you can’t determine which family you are born into nor do you have all the time and patience in the world and even if you make smart investments, you win some and lose some. So this rich quick mindset in Forex should be abandoned by traders.
Forex trading is a highly risky endeavor, and though countless online sources will tell you otherwise, it is not a quick way to make money. Trading currencies is not like trading stocks; there are no companies behind the currency values, and the currency market is 24/7, not restricted to when the stock market is open. If you’re thinking about investing in Forex, then take this small step first: find someone with experience in trading for guidance. Do not risk your money on something that could cause you significant financial harm, and be smart about how you invest.
YOU WILL BE UP IN THE MORNING AND DOWN IN THE EVENING
One of the most common myths in Forex trading is that you will be up in the morning, and then down in the evening. This is not true – it’s a myth because it suggests that you’re at the mercy of a system, rather than, that you have control over your funds. The Forex market is open 24 hours a day, and it does not have closing times. It is possible to trade on weekends, holidays, or any time during the week, for that matter.
You need to learn how to trade Forex effectively to succeed. So how do you do that? First of all, realize that there is no “right way” or “wrong way” to trade Forex; there is only your way. In other words, you can take as much or as little time as you want when learning about Forex trading. That being said, we would recommend spending at least a few hours on your research before going ahead with your first-ever trade. (You don’t want to jump in headfirst and get hurt.)
There are no safe investments, but some are safer than others. By educating yourself and taking advantage of the resources available to you, including knowledge from the Nairobi School of Forex Course, you can minimize your risk exposure. In forex trading, it is important to create realistic expectations that being in the market will bring about a modest profit over the long term and forex trading is not for everyone. The most important thing is to be comfortable with your choices and understand how you’re protecting and managing your money or assets. Do not trade because you are “up at night” – trade because you’ve done your homework and have a viable strategy.