As the name suggests, Forex Trading is the act of buying, selling, or exchanging foreign currencies at current or determined prices. The currency market is an over-the-counter market for currency trading and is considerably the biggest by measures of trade volume. It’s one of the more intricate markets to analyze because there are many participants that work on several levels. This is a huge global market that assists international trade and investment, and those that know how to work the market undoubtedly earn big bucks from trading currencies.
Don’t be fooled by everything you hear or see about forex trading! Here are the 5 most common misconceptions people
1.) It’s an easy way to get rich
Many people believe that forex trading is a quick and easy way to get rich. This is primarily because of the high financial rewards being spoken of by successful traders on top of small leverages, a variety of trading options, and extensive market hours. The misconception is that it’s easy, when in fact there are too many factors to consider to even speak of it as such. Even seasoned traders can’t guarantee you a 100% success rate.
It may not be E-asy, but the 3 E’s that can make it seem so are E-motional quotient, E-xperince, and E-xposure. Just like any other profession, you need to learn and develop your strategy over time if you want to be smart in forex trading. There is no shortcut to
2.) My trading method is the best/correct way
As mentioned, developing your own strategy to trading is essential in dominating the market. There is no single “correct” way or “best” way to trade. The only real measure of success for one’s method is profitability. Traders can consider one or all of the following when trading: Market analysis, style, and duration. Along the way, you can always get creative and adjust your strategies to always get the optimum outcome.
3.) Complex strategies work better than simpler ones
This is another misconception because there is no direct proof that the relative complexity of one’s trading method is directly proportional to the effectiveness of your trade. You are the only one who can determine the best method of attack and this can even change or develop as you learn through experience. Again, forex trading isn’t a one-fits-all kind of activity. There are an infinite number of ways one can effectively trade.
4.) Forex trading is just like gambling!
The only common denominator between trading and gambling is “risk”. However, even in their common denominator there is a subtle difference between the two: trading is taking on calculated risks, while gambling is betting on a favorable outcome with enough logical backing. So no, trading definitely is not just like gambling!
5.) No one really gets rich and stays rich from trading
There are many who not only survive but also thrive in the market because of both skill and knowledge. Yes, there will be some losses, even when you think you have mastered the waters. However, institutions and individuals earn a significant amount of income through forex trading. Forex trading just requires your effort, and learn to translate this effort into income.
There are a lot of other common myths about forex trading that may put off an individual wanting to start. You shouldn’t lose confidence just because you think the market will eat you alive. If you want a power tool to gain an edge to your trading career, then you definitely need to check out LCMS Traders. Go through the checklist and the class and you’ll be ready to kickstart your trades.