A lot of people who are thinking about investing in Forex are put off by some of the stuff they read on the internet about the Forex Market. A great many of these things that they read are not true, incomplete or inaccurate. Forex Investment is neither as risky, nor as rewarding as these exaggerated articles tent to portray it. Sure, you can make a great deal of money and you can lose a great deal of money, but it is possible to go into Forex Trading armed with a sensible approach and the knowledge that you have researched Forex Trading thoroughly. A good place to start is by avoiding these four misconceptions.
(1) You Will Make Your Fortune Trading in the Forex Market
One of the reasons that Forex gets a bad rap from time to time is that people believe the hype that they will be able to simply get their money, invest it in a load of currency pairs and then they will be able to kick back and watch all of their new riches start pouring in. This might happen to a few very, very lucky individuals, but it probably wont happen to you. The fact is that there is only a small percentage of investors who make their money through investment in Forex Trading. So getting rich quick is not a good aim when you start out. Rather, you should look at Forex trading as a way of building a retirement pot or nest egg.
(2) If You Have A Great Deal of Knowledge at Your Disposal You Cannot Fail.
Knowing what you are doing is essential and researching your markets is also crucial. Studying patterns of old trading and reading up on all the Forex sites and forums is also useful. But remember this. Just because you have read everything and studied everything and done all the Forex workshops does not mean you can feel confident of not making losses. Being aware of the possible pitfalls does not mean you will always avoid them.
(3) You Should Always Listen to the Experts of Forex Trading
There are a lot of people out there who claim to be experts in Forex Trading. Whilst some of them will inevitably be telling the truth, they won’t all be experts. Learn to be discerning about who you listen to and always bear in mind that no matter how knowledgeable they are, they could still be completely wrong. Learn to trust your instincts on these things.
(4) You Should See Forex Trading as a Hobby
No. Take your investments seriously and view your trading as a part time job, not a hobby. It might not be able to make you rich, but Forex trading can make you better off and alternatively, can make you poor very quickly too. Take it seriously.
Alex is a freelance journalist and financial blogger. He loves to write about football and jazz but spends most of his days writing about mortgages, stocks and shares and payday loans.