Common Forex Trading Myths Debunked

Forex Trading is a phenomenon that has now spread to the general public. Nevertheless, it still suffers from many misconceptions, which - in a rather sneaky way - hinder its development. Many people give up approaching Forex Trading because they are persuaded by some rumors that undermine its credibility. Therefore, it is good to address the issue once and for all and clear the field of any falsehood. Here are the four most common misconceptions about Forex Trading.

It's a scam

It is undoubtedly the most recurring and, at the same time, most dangerous prejudice. Alone, it can enormously reduce the audience of potential aspiring traders. Why are many people convinced that Forex Trading is a scam? There are many reasons. First, because it is an activity that is actually difficult and challenging, where the risk of failure is just around the corner. Many individuals have approached Forex and, probably due to the wrong approach, have lost their capital. The relative ease of losing money has turned, in a certain collective imagination, into the perception that Forex Trading is a sort of legalized scam. Another reason can be traced back to the approach that some brokers adopt in their promotional activities. Advertising campaigns are often aggressive, overly simplistic, and characterized by an infomercial tone. This can only increase suspicions. The truth is different. Forex is a type of trading like any other, like those that have long acquired dignity among the general public. In terms of authoritativeness, the only difference between the stock market and the currency market is the traded asset.

You can easily make money

This prejudice is of a completely opposite sign. If the first gave Forex a negative charge, this one gives it a positive one. After all, it coincides with the message that some brokers, actually not very recommendable, intend to convey and use as a tool to attract new users. Often this idea is conveyed through testimonials of those who, starting from zero or very little, made it. The symbol of this approach is the spam video that circulated until some time ago, which begins with "Hi guys, I'm completely euphoric...." Promising easy earnings, and above all four or five zero earnings, is highly detrimental to Forex. In fact, it is one of the reasons why the first prejudice, that of the scam, has taken hold so easily. If they promise you to earn 10,000 in a few weeks and then you find yourself not only empty-handed but also with empty pockets, then the thought that yes, Forex is a scam, is fully legitimate. The truth, in this case, is that Forex as well as any type of trading requires many skills and certain moral qualities to be approached in the best way. Above all, it takes time to achieve significant earnings. Surely doing Forex is a serious commitment, which has nothing to do with attempts to make ends meet. Courage and ambition matter more than preparation According to the collective imagination, the engine of success is represented by moral "qualities" such as courage, ambition, determination. Some people think that this is enough to achieve their goals. This would apply to all areas of life, and therefore also to Forex. Nothing could be more wrong. Of course, moral qualities matter, but they have nothing to do with courage and, in general, with the more emotional qualities. Emotions and Forex Trading should run on two parallel lines that never meet. The prerequisite for success in Forex is prudence, as well as an iron sense of discipline. Determination is also important, but only if constrained within a perimeter guarded by rationality. This is the key word: rationality. And rationality suggests that it is necessary to prepare, study, carefully plan every move. The trader is a sniper, not a knight who charges headlong.

It's for everyone

This is also a positive prejudice, usually shouted from the rooftops by brokers who choose the easiest way. The truth is another, certainly sadder: Forex Trading, but trading in general, is not for everyone. Let's forget about the preparation, which can be acquired - maybe in months, maybe in years - but the issue of moral qualities cannot be evaded in any way. To succeed in the currency market, the trader must have characteristics that, unfortunately, are either innate or the result of life experience. Nothing that can be recovered, anyway. We are talking about a sense of discipline, prudence, cold blood, and the ability to withstand stress. These qualities are necessary because Forex is an extremely competitive environment, where a mistake, even the smallest one, can cost money.