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Forex Market Myths X - Summary

February 28, 2012 | Comments: 0 | Views: 121

The forex market is the biggest market of the world; there is a huge volume of positions traded every day, around 1 trillion dollars. Currency trading offers some advantages over other markets and investment alternatives that would make it a viable option for many people seeking a good business opportunity. But first we need to clarify some myths.

1.- Speculators are the bad guys.

It's human nature to blame others. The speculators are the scapegoat of preference when we talk about financial matters. The truth is they have no special power; they can't influence the market more than any other participant can. If you want to become a forex trader you need to grasp the idea that you are going to make your living out of speculation.

2.- Currency trading is risky business.

Many people believe currency trading is risky business, and will never even give it a try. There is the same amount of risk involved in trading the forex market as there is on anything else in life. As long as you are prepared you can keep your risks under control. You wouldn't dare to perform a surgery without preparation would you?

3.- The forex market is a scam.

Many sellers sell holy grails in bulk. When the holy grail fails who takes the blame? The market!!! On the other hand, its true, there are several unregulated brokers that rob their clients, and 95% of the traders are losers. That does not mean that currency trading is a scam or that you can not profit from it.

4.- You can trade 24 hours a day.

It's true the forex market is open 24 hours a day. However traders should take into consideration that there are periods when the market is active and periods when it's not. Knowing when is the best time to trade is very important and may the difference between profit or loss.

5.- You can accurately predict market moves.

Despite of what some market gurus want you to think you can't know, with 100% certainty, what the market is going to do, or when. The good news is that you don't have to know to have a profitable career as a forex trader. Trading is a game of odds and your job is to keep the odds in your favor.

6.- Complex systems are better.

Many, self proclaimed, experts want you to think trading is complicated; their job depends on that. There is a big industry that feeds on peoples fears and ignorance. When trading the forex market the less is more approach is the best one. All your decisions should be based on simple principles. Knowing what to do on every case is the difference between profit and loss. You should never feel lost while trading.

7.- Day trading is profitable.

Day trading can be very profitable for many; it's profitable for your broker, for companies that sell signals, and for some system sellers. But if you are an individual investor, just like me, day trading will make you lose money.

Many people were thought, from childhood, the value of hard work. Unfortunately this doesn't apply to trading. The forex market trends quite well; the secret is to think long-term.

8.- You can trade the news.

Although it is true that the news have some influence in the market. There is no way to know with 100% certainty how the market will react to them. What direction will it take, and for how long. On periods of high volatility, such as news releases, most brokers widen their spreads making it very difficult for anyone to make any profit.

9.- You need a lot of money to trade currencies.

Compared to other business opportunities the currency trading is a very affordable occupation. You don't need to be a billionaire to trade the Forex Market. One of the main advantages of currency trading is the minimal capital needed to open and fund your account. You might be able to start trading with only $10 dollars.

I hope this was helpful information!!!

Luis García - About the Author:

ABOUT THE AUTHOR Luis Garcia studied economics at Universidad Iberoamericana in Mexico City and has been involved in trading since 1998. Determined to see that beginners succeed and to help discouraged traders gain back their confidence, he developed the Shortcut Forex System at and

Source: EzineArticles
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