Like many other trades, forex trading is not without its fair share of myths and misconceptions. These myths can potentially influence any kind of trader, whether experienced or not.
When you know what these myths are and if you can steer clear of them, you can save yourself from unnecessary and unwanted troubles and frustrations.
We listed the most popular and most erroneous forex market myths you should not believe in. if you’re planning on becoming the best forex trader you can be, you better every word of this article!
Myth 1: Forex trading is easy.
This is the most common Brokerage Firm – Financial Institution of all the myths about forex trading. If you’re thinking of really making it big in the forex market, it’s going to take more than just simple luck and stock knowledge.
Some other people might advise you to just download and set up an Expert Advisor so you can make huge money while trading currencies. However,
Myth 2: You need to be rich before you can trade in the forex market.
Long ago, only the larger international banks and financial institutions could access and trade in the foreign exchange market. Now, with the boost of electronic trading, such days are already behind the Financial Broker – Financial Expert forex market.
Rather than launching a costly and large brokerage firm or bank, small organizations can just launch a forex white label and be able to operate a forex trading business very economically.
Further, the forex market has already become accessible to small traders via forex brokerage accounts. That means anyone that has a reliable internet connection and a relatively small amount of money can trade currencies online.
Nowadays, you can open your very own brokerage account for as low as $25.
Myth 3: It’s better to have higher leverage.
Trading currencies on margin entails a high level of risk. As a responsible trader, you should know that the higher the leverage, the higher the level of risk due to the higher magnifying effect of the leverage.
Trading with relatively smaller amounts of leverage reduces the possibility of losing all of your funds. Trading with a higher level of leverage could result to large losses that can wipe off your trading capital.
Myth 4: You can get rich quickly.
In the forex market, there are a lot of speculators who jump right into the forex market with hopes in minds that they can rich very quickly with very little effort. Unfortunately, such kind of quick wealth grab is rare even in the world’s richest and most liquid financial market.
Trading takes a fair amount of effort for you to master. It also takes significant amount of patience and consistency. The impulsive gambler way of thinking seldom, if at all, works in the world of the foreign exchange market.
Myth 5: The Market is Rigged.
When there are too many bad trades, some traders often complain that the market is rigged or that the brokers are somewhat corrupt. Even though it is true that a country’s currency can be controlled by governments and central banks to an extent, the forex market is not a scam.
The fact is that foreign exchange is too liquid and volatile to be rigged. Forex rates change very often and disciplined traders are there to take advantage of the fluctuations witnessed in the market by using well-structured strategies.