Major Forex Trading Misconceptions & How to Ignore Them
Trade Forex Zen
21 August, 2014
The forex market is awash with forex trading misconceptions and it is easy to fall into the trap of believing those misconceptions particularly after a series of currency trading losses. Many of these misconceptions have been materialised from nothing over the course of time and it is vital that you learn to differentiate the fact from the fiction in order to succeed on the market.
Listed below are some of the most widespread FX trading misconceptions. Read on to learn more
Following the Crowd is the Way to Go
There is no such thing as a 'right' or 'wrong' forex trading strategy. The strategy that you use needs be completely compliant with your unique personality and trading requirements. If you adopt a trading strategy that is right for one person, you could wind up becoming incredibly stressed by the forex market because that strategy doesn't suit your personality. For this reason it is vital that you develop a trading strategy that suits your unique abilities, risk constraints and account balance.
The Market is Rigged
Unlike stock trading or other financial markets, the forex market is so huge in size that it is not possible to control or rig it. There are thousands if not millions of people trading forex every single day and such a huge volume of trades means that it is simply impossible for the market to be rigged. Even if a central bank or other major conglomerate tried to rig the forex market, they might do so for a matter of minutes but after that normal trading will resume and standard market prices will return to normal.
Its a Get Rich Quick Scheme
Successful FX trading takes time, energy and effort. You won't make a fortune overnight as you first need to improve your forex education, develop a stellar online trading strategy and overcome the psychological limitations that the foreign exchange market often instils in people.
Even the most successful online trader took years to build up their knowledge of the market and gradually increase their online trading account balances. Be patient and don't expect miracles to happen overnight. Success comes with hard work and dedication as well as the ability to take setbacks well.
Making Money from Forex News Trading is Easy
Many online traders follow forex news to remain afloat of the latest market influencers and even to execute their trades based on this information. Although it is important to keep up to date with the latest market and forex news, it is incredibly difficult to execute a successful trade based on the latest forex news release.
If you do wish to trade the news then you need to develop a scrupulous FX trading strategy that you can execute sharply and accurately as soon as the news is released.
The More you Trade the More you Gain
This is a common misconception that easily results in major trading losses. Successful forex trading is about quality over quantity so your priorities lie in developing a leading strategy that you have practiced over and over on a demo account. Start off small and work your way up, keeping things simple and streamlined. This ensures you spend limited yet high quality time on the trading platform.
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