This article aims to remember the many myths that exist about trading the forex market and all the promises and lies that exist. The main target is to be realistic, honest, and down to earth because marketing is a very good friend but can also be a terrible enemy.
So we start with the synopsis of what is truth and what is not and what is the main enigma to be solved. Here we go:
Truths: The forex market is the largest and the most liquid financial market at this moment and probably will continue to be as daily transactions are far beyond the transactions made by the major US stock markets. There are no commissions in forex market .Truth and false the same time. There are not but it is hidden with the spread of 2-3 pips in most brokers. The brokers win from the pip spread so the difference is their commission. There is a lot of potential in terms of huge profits as there is a great leverage in most cases over 100 times. Most technical analysis of stocks, commodities etc apply to the forex market so if you know about it you can trade with more confidence the forex market. The forex market trends well so if you follow the trend and do not fight it the chances are that you will make money. True but also requires further explanation. This is next.
Ok. So now let's refer to all the lies, promises and marketing promotion ideas. It is easy to make a fortune in the forex market very quick and easy. That is why most people fail and lose their accounts completely in a very short time. Remember what I said about the leverage earlier? With up to 100 times it is great when you are right and awful when you are wrong. Most brokers entice people to open a small account with 200-300 USD just to trade their platform live. Very soon this money is vanished and you are left wondering what happened. Some claim that they make extra profits every month.
It is possible but in most cases is not, it is just bait. The worst of all is when they promise that you can learn trading in a very short time and open a new account to trade just lose the whole amount very soon. And by the way today as it is the first Friday of the month is the best day for brokers and the worst day for traders as there is the release of Non Farm Payrolls. For brokers it is a paradise as the earn from your trades in a very unpredictable way on this day. For traders it is a nightmare as they could win big or lose a lot within seconds. It is just not worth trading this day.
So to recap. The forex market is the best market in terms of market efficiency, depth and is definitely worth taking a look if it is only OK with your level of trading experience, risk tolerance and investment horizon. It requires a lot of research and paper trading first and is a market that you can win a lot or lose everything within days. So do a lot of intensive home work. Start with a business plan and first with the answer to the question why do I want to get involved with this market? Am I sure to make it? Or is it best to spend my money elsewhere? At least I will enjoy some shopping etc.
Successful trading in all markets requires a lot of hard work. Nothing comes easily. When it comes to forex trading definitely it is not easy to make a fortune as promised. It is not impossible but but it will not happen in a few days and if you do not apply from the beginning very strict money management rules. And above all be realistic. Do not spend your money away particularly on a day such today with the NFP coming out. Invest in knowledge, experience, self-control, desire and motivation to succeed and be realistic. Marketing is a great tool is used properly.