Forex trading is a global market where traders from all geographical locales meet. From the greenest novice traders to the experienced veterans, forex facilitates the pursuit of a wide range of financial goals. The market is however surrounded by misconceptions and false beliefs about the essential forex functions. Unfortunately, some of these beliefs lack market education proofs. They trigger fear, overconfidence and even overtrading among other behaviors, and most of them make the traders go through massive loss. Because of these misconceptions, an overwhelming number of the traders opt for other professions shortly after joining the forex market because they relaxed that the traders are opposite of what they knew.
So, if you are planning to open a Saxo online trading account, below are some of the prevalent falsehoods to be aware of:
Forex trading is a “get rich quick scheme.”
Active forex rewards attract a vast number of new market participants every day. Most of the people are falsely convinced that they will get rich quick if they join the market. Contrary to this belief, losing capital on a daily basis is part of the trading, and success is not 100% guaranteed. Forex market is highly competitive, and therefore you cannot start making gains immediately when you join. You must be armed with the right trading skills, discipline, and mentality if you wish to be successful.
There is only one right way of trading forex
There is no wrong or right way of forex trading. The right one is the one who makes money. Millions of forex traders transact on a daily basis, and each one of them uses their own strategies which they consider effective. This means that there are infinite forex trading strategies. So, don't be convinced that you can only be successful by using one method. However, whatever strategy you decide to use, combine it with the right fundamental and technical analyses.
More is better
The forex market is usually open 24 hours per day for 5 days a week. It also provides more than 200 currency trading pairs to its participants. While the long market operation hours and the large selection of currencies offer a more significant opportunity for trading more, overtrading doesn't mean that you will gain more. Overtrading causes fatigue and lapses your trading discipline. You may be operating in losses if you keep on overtrading.
Forex trading is expensive
This misconception is common to the new investors, who are forced to believe that you need millions of dollars to trade on the saxo online trading platform. This is an old misconception which originated before the rise of online retail trading platforms and increase in the use of the internet. This is because, at that time, the forex market would only be accessed by the affluent forex traders who would transact significant amounts of cash. With the technology advancements, things have changed now. You can open a live online trading account Singapore with as little as USD 50. This makes it easy for young investors to join.
You must have a complicated strategy to make money
Both the new and some experienced traders are made to believe that they can only make substantial amounts' of profits from the forex market if they use complicated strategies. This is not true. Actually, most of the traders who use the complicated strategies don't make money at all. To be successful in the field, you must come up with simple and easy to follow strategies. The strategies should follow the trends and align well with the current dominating trends in the markets. The simple strategies are better than the complicated ones because they do not have many variables. Too many variables are hard to monitor, and that's why they have a more significant potential of causing market losses.
Misconceptions and misinformation are costly themes in the forex market. It's, however, good to be aware of them such that you don't end up falling victims of them.