A few people that do not know about forex trading think that it is a scam. Others think that it may not be a scam, but it is not a profitable business. It doers not matter whether you are a beginner in forex trading or a seasoned trader because you have to know that the misconceptions will always be there. These misconceptions can make some people give up on trading and they can also affect even the best in the market. Many of the forex trading platforms and brokers in Australia, try all they can to prove these myths long. One such platform is Rakuten forex of Rakuten securities.
Below are some of the myths about forex trading
Trade in forex and get rich quickly
One of the most misleading misconceptions about forex trading is that once you start trading, you will get rich very fast. With this in mind, many people jump into the trading wagon without first finding out what it really takes. The get rich quick is a myth. You do not start trading today and expect to become rich tomorrow. It takes patience to get where you want. It is not a one-off affair, but you need to keep trading over and over again even after you make your money. Unlike gambling, forex trading requires consistency.
Forex is not for long-term traders
This is another misconception which has become popular because of the high leverage which makes short term trading a popular thing with many traders. There are however long-term currency trends in the market that focus on larger than everyday turns. Some traders avoid short term trades because of the number of spreads paid. Longer time trades reduce the number of spreads.
The forex market is very corrupt
Some people out there think that the forex trading market is full of rigging and corruption. Forex itself is not a scam. However, it is possible to get brokers that defraud investors giving the exchange trading a bad name. it is one of the largest markets in the world and so would obviously attract many different kinds of people.it is also very easy to point these frauds and before you start trading, you need to know the people you are dealing with to avoid getting scammed.
You do not get any losses
This is totally untrue because losses do occur in every business and forex trading is no exception. You cannot be right every time you trade, and it is therefore prudent to prepare yourself for anything. You either make a win or a loss. If you accept this, then finding a winning strategy so that you do not get disappointed will do you good.
Make more trades in a day for more money
Some people may think that if they make so much money with just one trade, they would make much more than that if they traded more times. It is a nice thought and it is possible but very risky. It is better to trade less and give complete focus to the few pairs you are trading in than focus on a whole lot more. Focus only on what you are sure of and a trade that you know has the best opportunities. Every trade needs patience, good strategy and focus. You might lose it all by trying to get it all.
Predict the market and make money
Predicting the market may lead to your downfall as a trader. You get biased on the market trends by predicting. You stop thinking rationally and only see things on the scale you want. Many of those that predict the trends, only see the profits and rarely think about losses. The market does not stay at one place but keeps moving up and down. The movements and not the predictions are what should dictate the trades.
A simple strategy will make you losses
When anyone is starting out on any business, they need to strategize. Many begin small and build their businesses along the way. For forex traders, that small strategy can bring in big returns. Thinking that the bigger the strategy the more returns you will get may mislead you into making grave mistakes. Don’t change whatever system you have in place.
Tarik Pierce is the founder of InvestorTrip.com and regularly contributes articles to this website.
While living overseas, he uses PureVPN for a low cost VPN service.
He recommends Bluehost for setting up your own personal and/or business blog.
While his background is mostly related to trading stocks, he recently gained interest in real estate crowdfunding with Fundrise.