The 3 big lies which is part of Forex Trading
There are 3 popular misconceptions or wrong notions about Forex day trading, which are familiar to anyone who has spent some time in this business. Beginners however give a lot of credence to these ideas and this leads them to the path of assured failure.
So how do you bypass these common pitfalls in Forex trading? Let us first take a brief look at the 3 ‘avoidable’ areas in Forex trading.
Misconception number one is that this trade generates regular income and profits.
Now use your common sense here. Can anything be able to generate regular income and also profits which is so unpredictable and alterable as the Forex market? The market is volatile and changing all the time. Even after using all your best Forex strategies it is very common to find that the assured profit, in a moment’s notice can turn into a blockbuster failure! So the next time some one tells you that he is making x% profits every month, look for the nearest exit in the room.
Ability for price prediction.
This is misconception number two. Imagine this. Is it humanly possible to foresee future? You can come close to the results but this does not mean that you are 100% accurate all the time. If only there was a theory that was in place which predicted the future trend and prices accurately all the time, after taking in to account interest rates cuts, falls and rises, bank policies, change of authority diktat, and more. Impossible!
The third misconception is that this trade allows amassing huge profits with minimum exposure. There are some crazy advertisements of systems, which assure you 100% profits with only 1% drawdown. Check the profit and loss account of individuals who have used such systems and you know the truth.
The truth of the mater is that 95% of traders lose their money if they believed even one of the misconceptions cited above. There are three essential lessons to be drawn from the Forex market and they are (1) think of long term profits (2) risks are part of every day life in this trade (3) you have to play against odds with least amount of certainties. Trust the old saying: no risk, no gain.
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