Forex trading is an activity of buying and selling foreign currencies to get profit from the difference between the selling price and the purchase price.
Forex trading activities have long been popular in this world. However, forex trading also develops myths that live in the community that is not true and needs to be straightened up so that it does not cause misperceptions.
Let’s check out the popular trading myths among traders:
Forex trading is difficult and only controlled by economists
Some people who are unfamiliar with financial markets will consider forex difficult to understand. Moreover, they think that the calculations are complicated and only those who understand economics can trade forex.
However, the myth is not true because anyone can trade forex, whether old or young, graduates or high school graduates, entrepreneurs and employees to housewives. Everyone can become a professional trader as long as they want to always learn, be consistent in forex trading and have patience.
Warren Buffet, a successful investor from the United States once said that you don’t need to be a rocket scientist. Investments are not a match where people with an IQ of 160 outperform those who have an IQ of 130.
It needs very large capital
In fact, with affordable capital, you can already trade forex at any brokers. Indeed, this myth is not entirely wrong because it depends on the broker that you want to use. Nowadays, as technology advances, forex brokerage firms offer trading with smaller sizes so that trading capital can be affordable to the wider community.
However, if you want to expect big results, you certainly need more capital.
Forex trading is the same as gambling
Many people still think that forex is the same as gambling. Though the difference between Gambling and Forex is clear.
In gambling, decision-making is based on how lucky you are. This is different from forex where decision making is based on technical and fundamental analysis. Additionally, your successful trading based on what method which you use. According to The Balance, choosing the trading style that best suits their personality can be a difficult task for new traders, but is absolutely necessary to their long-term success as a professional trader.
Trading makes bankrupt
Like a business, you must manage forex trading properly so that it can generate the desired profit.
As with other investments, the funds used for trading are not funds that are used for daily needs or your business needs. But the funds that you set aside specifically for trading. Thus, if your trading performance is not what you want, it will not interfere with your life.
Besides, there is risk management as well as business in general, which is stop-loss, money management, and risk-reward ratio.
You must monitor prices in front of monitor everyday
Your imagination of a forex trader maybe someone who is always in front of a computer monitor screen to monitor forex prices. This view is not entirely wrong, but it is not entirely correct either.
Currently, traders can conduct forex trading activities via smartphones. Besides, if you want to execute a trade at a certain price, for example, you want to make a profit (Take Profit) trading of USDJPY pairs at a certain level, you can use the facilities in the application to execute trades at the price you want without you being in front of a computer screen.
Thus, some popular trading myths from the public should be proven and asked forex trading practitioners who directly experience how forex trading is.
Read more: Keeping Trading Journal, Can You?
