Author : James Woolley
If you have any experience of forex trading, you will probably have heard the three common beliefs mentioned in this article However it should be pointed out that, despite popular belief, they are actually complete myths and are totally untrue
The first of these relates to learning how to trade forex It’s often pointed out by so-called experts that one of the best ways to learn how to trade is to place paper trades for a certain length of time In other words you write down the trades you would have theoretically made if you were trading a live account To me this is completely pointless because anyone can do this, and it doesn’t really teach you anything about forex trading because nothing is at stake
A much better option is to read as much as you can and learn from experienced forex traders before developing your own forex trading system Then start trading a live account but with very small stakes This way there is emotion involved if you place a losing trade, even if it is only small stakes, so this motivates and pressurises you into finely tuning your system so that the next trade is a winning one and the system becomes profitable overall
The second misconception is that forex trading is easy You will often see this statement made on sales pages when someone is trying to sell you their ‘amazing’ system However as an experienced trader myself, let me assure you that trading forex is anything but easy Indeed this is borne out by the fact that only a tiny minority of people who try their hand at this potentially rewarding occupation actually make any money It’s a sad fact that most people will end up blowing their bankroll and quitting trading altogether, so it’s certainly not easy
The final misconception is that if you want to make the big money, then you have to be in front of your computer screen all day long in order to trade a lot of positions This is completely false because if you switch to longer time frames, you can capture far bigger price moves which more than make up for all of these smaller trades Plus it’s a lot less stressful and far easier to make profits this way because technical analysis is so much more reliable on the longer time frames
So if you ever hear someone come out with any of these statements, please ignore them because they are talking complete nonsense
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