Boasting an average daily turnover of more than $5 trillion, the foreign exchange market is said to be the biggest trading market in the world when it comes to volume. And, like any other financial market, it comes with its own set of myths. These myths can potentially affect the decisions that traders make and can lead them to make bad trades. For this reason, it’s important that you learn what these myths are and steer clear of them to prevent yourself from facing unnecessary frustrations.
Below, we take a look at a few of those myths:
- Forex trading is simple and easy, and you can get into it quickly.
This is probably the most common misconception that many people have about forex trading. A lot of them think that all you need to do is to read a couple of books about investing, create an account, and you are set to make huge profits in the market. People who want to get into bitcoin trading, which is now one of the top forex currencies in the market, think this way. If you’re similar to these people, you’re in for a rude awakening. Forex trading is anything but fast and easy, and it’s going to take more than just reading a few books and blogs about investment. You have to put in a lot more effort and time in order to become a successful trader.
- You need an economics degree to engage in fx trading.
While we did say that fx trading is not as simple as many people think it is, it’s not so impossible that other people who don’t necessarily have an economics degree wouldn’t be able to do it. While you do need to have an understanding of how world economics works and be able to generally grasp economic concepts, you don’t need to have advanced masteral and doctorate degrees in economics and understand every economic principle there is. To be a successful trader, you need only have an affinity for numbers, sharp financial intuition, and the best forex trading platform you can find.
- You need to monitor your account 24 hours a day.
Compared to stock exchanges, the forex market operates for longer—24 hours a day, 5 days a week. To be successful in fx trading, it will need a lot of your commitment. However, that doesn’t mean you need to monitor it round the clock. You don’t really need to sit in front of your computer or constantly check your phone to stare at your account’s charts all day long. Instead, you can find a lot of automated trading platforms that will do a lot of the work for you while you’re attending to your day job or important personal errands.
Your chances of success in forex trading has much to do with your understanding of how the forex market works as well as its drivers and the factors that influence its currencies’ rates. Ultimately, it comes down to your ability to learn from and adapt to the constant changes in the market.
