Common forex misconceptions

[SanMiguel]

You often hear the folloiwing said about trading:

1/ This is a game of the professionals vs the noobies and it is the noobies who are the losers.
Isn't it just a game of good trading vs bad trading? Bad traders lose?
Forex is moved by fundamentals long term. Why would the professionals be picking on noobies?

2/ No 1 strategy will work all of the time. For example, you will have to change strategy regularly, every few years.
There have been strategies like candle trading, support and resistance, etc. that have been around for years and never changed!

 

[timsk]

3/ It's easy - or at least easier than other markets. I've never traded it, so I can't comment. However, the very idea that one market is easier to trade than another or that one offers much more low lying fruit than another is a joke worthy of the forum by the same name.

NB: I accept fully that most traders trade the markets they do for specific reasons and, even, that they may be profitable trading one market and unprofitable trading another. This is down to personal preference and is very different from the notion of an 'easy' market suited to ALL newbies.

 

[disi]

You often hear the folloiwing said about trading:

1/ This is a game of the professionals vs the noobies and it is the noobies who are the losers.
Isn't it just a game of good trading vs bad trading? Bad traders lose?
Forex is moved by fundamentals long term. Why would the professionals be picking on noobies?

This is opinion popular among people who can not trade and earn. It is always easier to say "I lose but it's because those bad brokers/professionals". In reality FX is market like all other markets - a bit more volatile so it requires different techniques but still. If price is changing there is always room for gain. Price change - this is what we are interested in as traders.

2/ No 1 strategy will work all of the time. For example, you will have to change strategy regularly, every few years.
There have been strategies like candle trading, support and resistance, etc. that have been around for years and never changed!

I do not agree. Besides - candlesticks are not 'strategy'...it's only a way to look at markets. It will not give you any special gains on it's own. Support and resistance? It can be broken - then what? Theory says we should follow- and what of market reverse? It's not that simple.

There are no secret techniques and no 'ever existing' tricks. Market is changing because people are changing - and we create markets with our actions.

 

[finvik]

The biggest misconception on forex is 'Easy Money'
Many people, in fact all people, after working a 9-5 job, are interested in a way to earn easy money. Since the Forex market has become such a buzz word over the last few years, people think this easy money will come via Forex trading. They could not be more wrong. It is true that Forex trading can be from the convenience of your own home, and you have the ability to buy hundreds of thousands of dollars at the click of a button. Yes, that part is easy. But then again, so is throwing your money into the wind. The trading itself might be easy, but making profits consistently is far from easy. It takes a lot of discipline, a broad education on the topic, and a tremendous amount of patience on the part of the trader.

 

[SanMiguel]

This is opinion popular among people who can not trade and earn. It is always easier to say "I lose but it's because those bad brokers/professionals". In reality FX is market like all other markets - a bit more volatile so it requires different techniques but still. If price is changing there is always room for gain. Price change - this is what we are interested in as traders.



I do not agree. Besides - candlesticks are not 'strategy'...it's only a way to look at markets. It will not give you any special gains on it's own. Support and resistance? It can be broken - then what? Theory says we should follow- and what of market reverse? It's not that simple.

There are no secret techniques and no 'ever existing' tricks. Market is changing because people are changing - and we create markets with our actions.

Well, yes but support and resistance has been around for a while. The fundamental part of forex is like anything, economics. There are points that are expensive and points that are cheap. This has existed for a long time, surely. Methods based on indicators might not work forever.
?

The biggest misconception on forex is 'Easy Money'
Many people, in fact all people, after working a 9-5 job, are interested in a way to earn easy money. Since the Forex market has become such a buzz word over the last few years, people think this easy money will come via Forex trading. They could not be more wrong. It is true that Forex trading can be from the convenience of your own home, and you have the ability to buy hundreds of thousands of dollars at the click of a button. Yes, that part is easy. But then again, so is throwing your money into the wind. The trading itself might be easy, but making profits consistently is far from easy. It takes a lot of discipline, a broad education on the topic, and a tremendous amount of patience on the part of the trader.

Why has it gained so much more popularity recently?

 

[Rhody Trader]

Why has it gained so much more popularity recently?

Advertising. The forex brokers have spent loads of money on it.

 

[disi]

Advertising. The forex brokers have spent loads of money on it.

Forex market has a lot of advantages over other markets(trading hours, advanced charting/platforms). I think even without advertising it would be a big thing for many of us. The problem is that due to high leverage people actually DO THINK it is easy to earn on forex. In reality it is as hard as on other markers. And if a new trader comes from futures or stock market FX can be even harder for him than those two. It demands different attitude.

 

[GammaJammer]

It's all a huge conspiracy at interbank level and all the banks are totally in cahoots with each other and we all sit around trying to figure out where the retail traders have their stops and then we manipulate the market somehow to get it to go a pip through them. Oh, and we all have insider info all the time and regularly trade on it. V common misconception.