If you're considering getting into the forex market and have heard claims that worry you or that sound too good to be true, it's best to investigate these claims and find out the truth. With all the lies, fake news, unrealistic promises, and baseless accusations, it's hard to know what to trust and what to ignore. That's why we decided to dispel some of the biggest myths about forex trading and bring the truth to light.

1. Easy to get quick profit

Many people think that making money in the forex market is very easy. You just need to look at the screen and click a few buttons, and you can earn a lot of money. But the truth is that before entering the forex market, you need to learn the basics of currency, economics, and financial knowledge. Once you've acquired theoretical knowledge, it's also important for you to be the master of your own emotions. Because there will be times when your emotions will cause you to make irrational decisions, and cause you more losses in your trades. And that's something you should avoid when trading. The profit from trading is not only a confirmation of knowledge but also a recognition of discipline.

2. Forex is only for the short-term trader

High leverage has made short-term forex trading popular, but it does not have to be that way. Long-term currency trends are determined by fundamental factors, and these long-term trends are tradable. Long-term traders focus on the larger trend and do not care about daily fluctuations. Other than that, the longer-term time frame can be beneficial for some traders, as it reduces the number of spreads paid (the equivalent of a commission) and traders are more likely to avoid short-term impulse trades. Currencies can also be used as an investment to diversify or hedge buy-and-hold portfolios.

3. You need to prepare a large amount

What's special about the forex market is that you don't have to invest large sums of money to trade there. The market works on the concept of leverage. Leverage means that you invest a small amount of money and can take positions much larger than your investment. The forex market usually offers the client a leverage ratio of 1:100, which means that for every 1,000 USD in your account you can trade up to 100,000 USD.

4. Higher leverage is better

As mentioned above, the market is based on the concept of leverage, but this doesn't mean that higher leverage is better. Leverage is a double-edged sword: it can help a disciplined trader to make a profit with a small capital, but it can also punish a greedy trader who loses all his capital in a single trade. Therefore, fund management is very important in the forex market.

5. Trading Forex is a type of gambling

This forex trading myth could apply to almost any type of trading. But unfortunately, many people wrongly assume that forex trading is simply gambling. This is a prejudice that comes from ignorance. There is an element of luck in just about any endeavor, and forex trading is no different. What separates gambling and forex trading is that gambling purely relies on luck. Yes, you can argue that you have your own "ways" or techniques to win more in gambling, but ultimately it is still based on luck. Whereas Forex, you can learn and follow trading plans to profit from trades consistently, trading plans are based on actual skills not luck.Good money management is key. Cloud spending optimization and other budget issues need to be kept in check. If you trade wisely, you can make a profit. If you trade forex like the same way you gamble in casinos, well then you can't blame anyone for the losses because basically you're just "gambling" forex, that's not trading by any means.

In fact, forex trading is speculative, but it is not gambling.

6. You can earn from the monthly interest

Forex isn’t a savings product. It’s an investment that depends on the fluctuating prices of foreign currencies. A trader only profits if the value of their chosen currencies rises. Forex traders make a profit based on movements in the market. Investments don’t earn interest.

7. You need to follow the market all the time

This is another one of the more common myths surrounding online forex trading. Just because the market is open 24/7 doesn’t mean that you would have to follow it all the time. You can simply allocate a certain time each day and use it to monitor the movements. Most traders will not stick to their monitors 24 hours, usually they will construct a daily task list. An example task list: 1) complete 4 trades 2) find a good entry point for a long term trend, and etc...

In this way, traders will be able to properly allocate time and stay fully focused during the period. Once the tasks are done, they will continue with their daily lives.

8. The forex market is manipulated.

The forex market is influenced by international macro factors such as politics, military, economy, supply and demand, as well as interest rates set by the central bank of each country, the stock market, the economic environment and economic data, political decisions, various political factors and important events. In fact, these factors cannot be controlled by any one investor or group. Investors of foreign exchange transactions are spread all over the world. Moreover, foreign exchange rates are quoted according to the conditions of the international foreign exchange market and international conventions. It is difficult to obtain insider information and engage in insider trading, hence the market is difficult to manipulate. In addition, the global foreign exchange market has a huge transaction volume. Individual price manipulation is difficult, which creates a fair environment for investors to trade

Still have more myths to share? You can leave us a message in the comment box!

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