Amongst many misconceptions and forex trading myths, the amount of false information on the internet can feel incredibly exaggerated when first-time traders begin their initial research period.
Forex Trading Myths
Some are concocted by people who have never traded, and some by traders that might have failed once or twice – regardless, in this article, we discuss some of the forex trading myths currently circulating in the industry.
Is forex trading legit?
Many people may dismiss forex trading as a scam, most likely due to a lack of understanding and knowledge of the industry. In reality, the forex market is the largest in the trading world and offers the opportunity to add great success to a trader’s life in their career, lifestyle and for their loved ones.
It’s entirely legal, but as with any endeavour where money plays a huge role, it is crucial to look out for scams or false information on illegitimate sites or social platforms. The best way to handle potential scams is to be wary of any suspicious or fraudulent activity. Research is essential before investing a large sum of money in fraud – work with FCA-regulated brokers only!
Is forex a quick money-making scheme?
While you can create a substantial income from forex trading, one of the most common forex trading myths is that most assume it will be an overnight win. The expectation that forex trading can make you incredibly wealthy overnight is unrealistic and not manageable. This is why more of the younger generation of traders are rushing into trading without doing the relevant research.
It isn’t a quick cash game. The art of trading achieves the best results. Plenty of discipline, hard work and training go into forex trading, and wins are not always guaranteed. Consistency is everything, and an ongoing trading strategy is the best first step.
Is it profitable to trade forex?
While it’s not likely you will become impressively wealthy overnight, you can make a valuable profit depending on how much focus you put into your risk management, strategy and general trading efforts. It’s recommended that you invest at least a minimum of £5,000 to start making a profit, but you could begin your forex trading journey with as little as £1 – keeping in mind that you might not get the results you’re aiming for with such little investment.
Is forex trading considered gambling?
Forex trading focuses on probability, whereas gambling is a game of chance or luck. As a forex trader, constant training and analysis help study how the market moves and the effect it will have on investment decisions.
Gambling depends on complete luck or basic odds. Sometimes you win big, and sometimes you lose even bigger, similar in some ways to forex trading but without a strategic plan behind it. You could dive head first into forex and gamble everything, but with good knowledge, you could potentially make continuous huge profits by taking risks based on data and research.
Do I need to make a lot of trades to see a return?
Focusing on a small number of currency pairs and trading less is more advantageous than making multiple trades a day for the sake of it. Patience is crucial, and holding out for slow but beneficial wins is the best way to find victory in trading. It’s better to have two successful wins than ten losses.
Support from Financial Markets Online
Being a part of Financial Markets Online allows you to cover a spectrum of trading styles and asset classes. Get in touch with us today to learn more about our forex trading courses to debunk those dreaded forex trading myths and become a valued forex trader within the industry.