Myth: Trading Forex Is Like Playing in a Casino
This means that all trading decisions are made at random, since it is impossible to predict the behavior of the market. Nobody says that Forex trading is easy. However, with a sufficient knowledge base and growing experience, the number of successful trades is constantly increasing. Playing roulette in a casino will not increase your chance of winning, no matter how much money you invest.
Of course, it is impossible to predict market behavior with 100% probability. If it was so easy, everyone would rush to make their millions on Forex. However, making only positive trades is not the main purpose of trading. Experienced traders know that some losses are inevitable. Professionals know how to minimize losses on unsuccessful trades and maximize profits on successful ones. This is the only possible and correct method of obtaining consistent income in Forex.
Myth: Forex Is a Fraud
This would be true if brokerage companies and their partners, that refer you to Forex, promised huge profits without any risks. However, no one gives guarantees on Forex. Any reputable broker always reminds you of the risks associated with trading, advises you not to invest the money you can’t afford to lose, and so on. You can and should make money on Forex. Success stories in the foreign exchange market are real.
However, it is worth remembering that there are enough scammers in this industry:
- Fraudulent brokers. There are some, but they are easy to avoid. Just register with trusted companies.
- Sellers of non-working programs (robots, strategies, indicators). Don't buy a program without thoroughly checking and testing the free version.
- False representatives of the brokerage company. Such scammers deceive you and make you fund their personal accounts. Try to make deposits only through your Trader’s Cabinet.
If we are talking about a brokerage company that has been on the market for many years, then you can’t be sure there will be no fraud. If you control your risks, you are able to achieve the financial independence that the broker talks about.
Myth: Broker Wants You to Lose
If a trader constantly loses, he/she will leave the industry. How can a company make money on that person then?
The broker is only an intermediary that earns on the commission paid by clients. If a trader constantly loses, then he/she will probably leave the company along with the commission he/she pays. Doesn't the idea of working to the detriment of your clients seem strange to you?
These are the main and most frightening of the myths associated with Forex. In the next article we will try to dispel a few more of them. Until next time!