The most popular and prominent myth about forex trading is that it is possible for someone who has invested $100 to make millions in profit, easy and fast. Adding to it, is the myth that there is a magical sweet-spot in forex trading that can guarantee someone an always-win situation. Both myths couldn’t be further from the truth and are a quite dangerous mindset to have for anyone going into online trading.
Before you consider Forex trading, you need to be aware of the following facts
Trading Forex is not an express line from rags to riches
It would be great for everyone if it were that easy to make millions and billions with just a few dollars and a couple of mouse clicks. Unfortunately, for everyone, it isn’t. Online trading is demanding. It requires significant dedication of time and effort. You need to ask yourself if you are able and willing to commit to it before going at it.
An always-win situation does not exist; no Holy Grail in Forex Trading
The market is an untameable ever-fluctuating wave. It’s impossible for always winning without sustaining losses. Even expert traders and professionals have losses and they know that having losses is normal and to be expected. Learning to cope with loss and properly managing your risk exposure is vital to successful online trading. Accept that you will have to sustain losses during your trading before thinking about winning.
It will not take you out of debt if you can’t afford to eat or pay your bills
If your economic situation is dire and you are trying to find a quick way to pay your overdue financial debts, then forex trading is not for you. You should be considering online trading only when your economic situation allows you the affordability of losing X amount of invested money. This doesn’t mean that you will definitely lose your invested money but given the risk involved in trading the markets, all traders should be prepared that they could eventually lose their initially invested capital. If you can’t afford to potentially lose money, then you shouldn’t trade forex.
Your chances of success without practice, experience and calculated trading plans are minimal to none
Forex Trading is a skill. Like all skills it requires practice. Lots of practice. Through practice comes experience. And through experience, a trader knows how to plan his strategies and how to apply them accordingly. Practice takes time and requires dedication and effort. The best way to practice trading is with a free demo trading account. You can and should use it as your own experimentation lab where you can practice even if you are an expert trader, a place where you can test new strategies and plans or put your existing ones through many hypothetical scenarios. Practicing with a demo account allows you to experiment without having to risk real money since you will be trading with virtual money instead.