This article was written by FXEmpire.com
Whether you are a seasoned trader or a newbie, you cannot be absolutely convinced of the fact that you are totally free of the innumerable Forex trading fallacies or myths that surround this industry. A Trader’s Fallacy is in fact, one of the potent ways in which a trader can go wrong. So what exactly are the misconceptions that you should be aware of, as a trader? Read on to find out.
What are the myths surrounding Forex?
Forex is designed for short-term trading
One of the major fallacies that has riddled the largest financial market (in terms of volumes of trade) is that it is actually meant for short term traders. Now, the presence of high leverage DOES NOT necessarily mean that forex can be indiscriminately branded as a short term trading proposition. Forex is very much about long term tradable trends as well. The traders looking for long term benefits are more concerned with the larger trends and not really bothered about everyday swivels in the market.
Forex is the simplest and quickest way to riches
Budding traders, making a foray in to the forex market, considering this to be their passport to quick riches— might as well think again. This prevalent belief, ruling the market space has hastened the entry of many a traders willing to make a quick fortune. However, it should be remembered that forex is much about patience as it is about making huge (not quick) wealth. All of it starts with the choice of right trading software (some of the leading trading software applications include QuantShare.com, ESignal.com and MetaTrader4.com.) Do you really think you would be able to generate huge profits without investing time in monitoring the market in a bid to analyze it and then build on your strategies in accordance? You need to demonstrate due consistency if you are willing to make it big here. The more you learn about the complicated charts and other analytic tools the more you are likely to psyche out. However, contrary to popular belief, success in forex is not about simplicity. The belief that simpletactics will yield better results than the complex ones is generally perpetrated by traders who are afraid of comprehending the complex layers of each of the trading strategies.
Identified Profit Targets are Infallible
You might come across trading systems which help you to benefit from an identified profit target. Scalpers usually set large targets just because they have spent considerable time on the trading charts than the long term traders have done. The problem is—just because the scalpers are doing it— does not necessarily mean that it’s a good practice. The market is hardly bothered as to what your targets are. For instance, if the market wants an offer only up to 10%, it won’t really bother if you are setting the target at 20%.
There is a “perfect” strategy for success
The belief that you can chalk out an infallible strategy has its own dangers. It will either leave you cornered for ever or else leave you languishing with an over optimized and inflexible game plan.