10 Myths about Forex

1. Forex trading is easy. Many people that want to start Forex trading 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 people think that they can buy a profitable strategy and it will make them rich in Forex. In reality that’s nothing else then a myth. Succeeding in Forex isn’t easier than mastering any other profession — it takes time, money and a lot of practice and hard work.
2. "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 too — there are many differences between trading stocks and the spot currencies. Firstly, Forex market requires a lot of hard work and dedication because Forex 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. Secondly, “buy&hold„ strategy simply won’t work in Forex market. Thirdly, you don’t have that much information about currencies as you can get from the companies’ reports and statistics.
   
3. "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 and night 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.
4. "I can be a successful Forex trader just following someone else’s signals." Many new and 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.
   
5. 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.
6. Forex is a scam. Some skeptics, disappointed and non-motivated 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.
7. "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.
8. "I need to use a very complex strategy to be successful in Forex." It’s a very 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.
9. "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 . Actually you can trade with a very a little capital, because Forex trading is almost always leveraged with the broker’s money.
10. 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.

Iit’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 non-motivated 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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