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Online forext trading, forex broker trading guide

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Forex myth-busting

forex_tips | 03 August, 2006 14:31

Forex trading is an exciting new toy in the financial field (and not just there) that begun appealing to all sorts of population layers. The stakes are affordable enough that almost anyone can play, and the potential profit is high enough to tempt even the most careful into the market. There’s something “sexy” about trading money – an appeal that stock, bonds and mutual funds just don’t have. With trillions of dollars changing hands daily in the forex market, it seems like everyone’s got a fool-proof system to win the money and get rich (and fast). Here are some of the things I heard, that are sure to get you broke in no-time:

You don’t need a plan to make money in the currency market – making money IS a plan - Trading without a well-thought out plan is like jumping out of a plane without a backup chute. Your plan is what keeps your eye focused on your goal, and gets you through the inevitable losses. Currency trading isn’t a short-term game, but most new traders (95%) quit within the first year because they didn’t have a plan to follow.

If you stick with a losing trade long enough, it will turn around - Sticking with a losing trade is a good way to lose more money. When a deal isn’t going the way that you expected, it’s hard to admit that you were wrong and get out – but it’s the best way to avoid losing even bigger money. Winning on one trade isn’t going to make you rich overnight. Consistently knowing when to get out – whether it’s to cut your losses or grab your winnings – is the way to be a successful currency trader.

Where there’s smoke, there’s fire - Rumors are pure rumors about 99% of the time. If you want to win in the forex market, base your trades on reality, not hearsay. On the other hand, rumors can alert you to look at what’s really happening and make a decision based on the movement that you see.

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