Click here to check the ultimate guide to learn how to leverage your PC and internet to make money online.
The Washington Independent
The Washington Independent

7 Biggest Misconceptions About Forex Trading You Should Know

7 Biggest Misconceptions About Forex Trading You Should Know

If you are a newbie regarding forex trading and you are thinking of entering this world, chances are you will feel overwhelmed with the amount of information available online, trying to understand how it works and where you should start.

Kaleem Kirkpatrick
Oct 22, 2021

Table of Contents

If you are a newbie regarding forex trading and you are thinking of entering this world, chances are you will feel overwhelmed with the amount of information available online, trying to understand how it works and where you should start. 

There are obvious advantages to the accessibility of information online. You can quickly learn a new skill by watching tutorials or signing up for a course, for example. However, among the multitude of information, it is of the utmost importance to know how to differentiate reliable sources from untrustworthy ones. So, there is a downside too. 

Misinformation can be overwhelming on the internet. For this reason, if you think about entering an area like Forex trading, it is crucial you separate the myths and misconceptions from what is true. And you need to watch out so you don't learn wrong concepts straight from the beginning. 

This being said, here are seven of the biggest misconceptions about forest trading that every newbie should know:

Forex trading gets you rich fast

Sure, trading currencies on the forex exchange market or FX can bring you incredible profits and earn significantly. However, it is far-fetched to say that you will instantly become rich just by becoming a trader. It doesn't happen overnight. It is of the utmost importance you learn all the ins and outs of Forex trading.

Therefore, you must allocate a significant amount of time and patience to learn and practice this to improve your trading skills. Only then can you think about profitability coming from this activity. So, it is a misconception that forex trading gets you rich fast.

Forex trading is easy

Indeed, forex trading might not be the most complicated and complex form of trading out there. This being said, it is far from easy. You need to be highly committed to learning it well. So, if you come across sources that state forex trading is easy and can make you a billionaire, don’t believe them. Unfortunately, this sounds too good to be true for a reason – it isn’t the truth. 

As mentioned earlier, it isn’t impossible to learn. However, you should know that it takes a great deal of time to understand how the market works, learn strategies, and forecast. Dedication and commitment are imperative.

Plus, risk assessment is a crucial aspect of forex trading. If you don't learn to identify and manage risks, it is nearly impossible to generate any profits. So, forex trading is not rocket science, but it isn’t simple either.

The complexity of methods guarantees success

More is not necessarily better. In forex trading, this means that complex strategies and methods don't equal guaranteed success. Sometimes, if you conduct a risk analysis and have an in-depth understanding of the market, a more uncomplicated approach can be the winning lottery ticket for you. 

For instance, a binary option is an all-or-nothing financial option. The trader must assess whether an underlying asset is above or below a specific price at a particular moment. This "yes or no" choice forces strategic decisions. Only certain companies are allowed to provide binary options to US citizens legally. Given that it is one of the simplest financial trading options, as a beginner, you might want to look into it and identify the best binary option brokers for US traders.

Trading forex is not for everyone

This is far from true. This is one of the most common misconceptions going around for people who have never done it before. Many individuals are under the impression that a specific university degree, certification or training is needed. In reality, anyone can do it. As long as you are dedicated to learning how the market works, assessing risk, and when to trade, you can get involved in forex trading.

Therefore, whether it is something you have been thinking about for a while or is a recent thought, know that it doesn’t matter what your profession or occupation is. Indeed, forex trading can be intimidating. But with dedication and passion, you can learn.

Trading more equals profitability

The main difference between forex and other trading markets is that it is open for 24 hours from Monday to Friday. The market opens in the Australasia area, next in Europe and then North America. And the way it works is that as one market closes in one zone, it opens in the following one. This way, traders can take advantage of it for five days continuously. 

This being said, it is imperative not to overtrade, as trading more doesn’t equal high profits. While it is a great plus that you can trade whenever and have more markets available for a few days, traders should be careful not to fall into the idea that there are infinite opportunities. This could be detrimental to their profitability as well as health. The recommended strategy is to trade during particular times, a specific market and currency pair. Learning how much and when to trade is highly important.

Forex trading is the riskiest

Many people believe that trading on the foreign exchange market is the riskiest type of trading. Being the largest financial market where you exchange currency, one of the main risks is highly volatile exchange rates. Plus, this market is not easy to predict.

However, there is a common misconception that forex trading is the riskiest. This is not truly the case because every market is different and has its own risks, which can affect profitability. Because of this, strategies to control and manage risks as much as you can is an effective way of generating good results. Once you accept the risk in forex trading, you can assess it better, and growth can follow.

Demo accounts are unnecessary

Not true. As a newcomer to the trading world, it is of the utmost importance to practice as much as you can before starting trading. This is what a demo account can do to help novice traders. It teaches you all the features available on the forex platform. 

With a demo account, you can practice as much as you can, learn how all the strategies and features work, and all while you don’t have to risk your real money. Therefore, demo accounts are certainly necessary as it gives beginners the chance to get acquainted with forex trading.

Kaleem Kirkpatrick | Kaleem weaves song and story together with experience from his 12 year career in business and sales to deliver a mesmerizing tale of wealth and anger – the ups and downs of disruption – using his expertise in music and entertainment. His background in philosophy and psychology allows him to simplify the science of why we construct trends, where they come from, and how to alter them to improve outcomes.


How to Choose Your Governance Platform Development

The new phenomenon, platform economy, has relatively witnessed massive popularity recently. A burgeoning number of industries have started adopting this business model in addition to other digital strategies and best practices to stay competitive and relevant. By that definition, do you even think about why this shift is a big deal to your business?

Why You Need a Cross-Chain Support: A Direct Explanation

Do you ever wonder if integrating a cross-chain can be ever used for your business? Well, with this exchange bridge, your information can be used between two comparatively free chains and systems. That means it enables your chains to work together with others for more convenience.

The 5 best online casinos in the USA right now

Since their inception in the 1990s, online casinos have grown to become one of the most popular online activities in the world. With the COVID-19 pandemic last year, and people all over the globe staying home and complying with lockdowns and health protocols, traditional land-based gambling facilities were forced to close doors and shut down physical operations.

Keep Up With Financial Trends & Practices As An Average Citizen

The average person may or may not be inclined to focus on their financial planning outside of their monthly budgets and certain plans for the future.

How to Find a Web Dev for Your Startup

Creating a startup is a cumbersome goal. But if done right, your idea may pay off greatly and even surpass your expectations. The majority of the most successful startups are tech ones, so there is no wonder that software developers are in such demand here.

The legalization of sports betting in the US keeps moving forward

The legalization of sports betting activities in the United States has been a heated topic of discussion lately as laws keep evolving to embrace emerging consumer trends. So far, 29 states plus the District of Columbia have fully legalized this activity while 3 states are still working on the last details of their local regulations to give operators the green light.

Tips And Tricks to Become a Successful Financial Writer

As writing, in general, can’t stop surprising with how many people are joining the industry, there is no doubt that financial writers will do just fine in the future. Regardless of the niche and type of writing, it has become globally accepted and many individuals would like to test their skills in it.

Benefits of Title Loans

Title loans are usually taken on cars and other vehicles. Title loans are loans that you take in exchange for putting your car as collateral. If a person cannot repay the loan in the given time slot, the lender can legally seize the vehicle.

How US Forex Traders Can Select Best Trading Platform?

If you are an investor interested in foreign currencies but you don't have the funds to trade them on your own, you can try a US Forex brokerage. A broker can offer a variety of investment opportunities, including stocks, mutual funds, options, and futures. The US government requires that US brokers must offer no-hedging accounts, otherwise, they may be subject to fines. However, a US Forex broker can offer several different account types.

How Does the Washington Lottery Compare to Other Big Lotteries?

Lots of us love playing the lottery, and for good reason. It’s one of the few widely accepted forms of gambling that lets you put down a small amount of cash with the potential to win a life-changing amount of money.

Tips for Improving Your Financial Wellness

Learning how to manage your money is an important skill to have, but that doesn’t mean it will be easy. Even if it seems stressful or intimidating, taking it one step at a time will help you gain peace of mind and a better financial situation.

© Copyright 2021 The Washington Independent All Rights Reserved

Terms & Privacy |

Click here to check the ultimate guide to learn how to leverage your PC and internet to make money online.