Forex is one widely misunderstood market. The mention of forex seems almost sinister in front of a common man. Well to be honest, I was one of those very people. But it all changed after I started studying about it in school. The mention of forex market had always deluded me. I could see some people getting very wealthy by trading in the forex market so I started associating forex with wealth. There any many people like me out there who share common and not so common misconceptions about forex. And it’s not just the general public, rather the traders themselves also believe in various misconceptions and myths about forex. So before you start trading or even if you are already a trader, clear up these misconceptions in order to avoid disappointment and anger.
Forex is an ‘Instant get rich scheme’
Who doesn’t want to get rich instantly? We are quick to hope and believe that we have finally found a way for that. Many of us tend to think that forex is one such solution. Sorry to burst your bubble of happiness but forex promises you no such thing. It requires a lot of patience and discipline to be able to make huge profits in forex. It’s not a gambling arena, a view held by many people. You need to wait patiently and make intelligent trades consistently.
My forex broker is scamming me
The moment people start to make losses, they are quick to put the blame on someone else. Either they complain it’s the market that is rigged or their forex broker is scamming them. Although scams are prevalent in the forex market and forex brokers scam too. But this is not always the case especially if you have a broker registered with a regulatory authority. The loss could be because of your own wrong decision and errors in trade. New traders in the market don’t have enough experience or patience and tend to make impulse trades to not lose on a trade and thus incur losses. So you need to assess whether what you are doing Instead of jumping to these conclusions immediately.
I can never be wrong in my forex trade
This is a misconception held by some traders that they can never be wrong with their decisions and always make the right trade. And when this does not occur they end up frustrated and lose heart. Well forex isn’t a market for the faint hearted. So losses will occur and you have to deal with them. You cannot be right each time. And when losses do occur you should evaluate your strategy and improvise it to bring forth better and positive results.
Forex trading with more pairs is better
There are certain people out there who believe in quantity rather than quality. Just like that there are traders out there who believe the more pairs they trade with the more money they can make. This is a very false belief. It is better to be focused on only a few currency pairs. You will benefit more if you concentrate your time and efforts on a few pairs to make the most out of it. Otherwise it would only a chaotic mess with you making lesser profits with more pairs. So remember in this less is more.
My predictions will help me make money in forex
This error is made by most rookies in the market. They believe their predictions are right and make decisions according to that. It is a very naïve move. Prediction tends to cloud rational judgment and lead to emotional moves. What you should do is to wait for the market to move and see if it moves in the direction of its prediction. You should trade according to the system.
I can follow others like a sheep in the forex market
As we all know sheep tend to follow each other without any thought. Just like that some traders follow the same method. They simply follow what others are doing. Thinking if it’s working for others, it will work for them too. This is a very wrong approach. The information you obtain from others should be carefully evaluated and then decisions which best suit you should be made. You should do what seems right and suitable to you according to your system despite what others are doing. You need to have an attitude with objectivity to be able to be successful.
I hope some of your misconceptions were cleared with the help of this article. For all the forex traders out there, trade wisely. Develop a strategy, test it and use it consistently if it gives you positive results along with that make sure you have patience and discipline. This will ensure you don’t fall prey to these misconceptions.