Are These 5 Forex Myths Or Realities

Are These 5 Forex Myths Or Realities

Before you enter in Forex trading, you must be equipped with the right knowledge and skills in order to succeed. That is, you have to be well-informed of the ins-and-outs of Forex trading. Here are 5 myths that may leave you astray in trading on Forex:

1. If you know how to trade stocks, making money on Forex will not be difficult.

If you think that you can simply apply your knowledge in trading stocks on Forex and make money, well think again. The Forex market is much more complex than you think. First of all, it is open 24 hours a day. This may not look like a big deal but it poses a significant difference compared to the stock market. The stock market may have periods of higher and lower volatility, but in the Forex market such differences are much higher. Do not take it easily knowing that Forex will be available 24 hours a day. Making money in Forex is not as simple as you think. You definitely need deep knowledge and understanding of this market.

Most of the time the indicators used on stocks don't work so well in Forex. So, it is not good to rely on indicators that normally work in stocks. It is also, much more difficult to find good brokers on Forex than on stocks. Many Forex brokers don't act in their clients' best interest due to lack of regulation in the Forex market.

2. You can make money anytime you want since the Forex market is open 24 hours a day.

There is no truth to this. A trader needs volatility in the Forex market to make money. Most of the time, there is not enough volatility to make good trades in the Forex market, though it is open 24 hours a day. Volatility can come at any time of the day and you basically can't watch the market all the time. You need to adjust your strategy in order to trade only in high volatility periods.

3. Free commission trades on the Forex market.

You don't have to pay a commission fee when placing an order in the Forex market but you need to pay the spread. The spread is the difference between the bid and the ask. That is why the more you trade, the harder it will be to make money in Forex because you will be paying higher fees. Just like in other markets, overtrading must be avoided at all costs in Forex.

4. To make money in Forex, you need to predict what will happen.

You need to react to what is happening in Forex to make money and not merely predict it. To be a good trader, you must analyse charts, read the news or whatever information you may have for you to react as fast as possible to market movements. You must be eager to learn and improve in whichever aspect of Forex trading.

5. More complicated strategy is the best.

Actually, it is the other way around. The more simple your strategy is the better. Often times, simple strategies or systems outperform the more complicated ones. You need to study the market and discover the strategy that would best suit you, instead of using plenty of different indicators at the same time.

Elliott Pearce is the creator of Supra Forex, the only Forex software that gives you high and consistent profits. [http://www.SupraForex.com] is an online software that combines 2 different strategies and it can be used with 20 currency pairs and spot gold. Check out Supra Forex Now