Forex trading is often misconstrued as a ‘get-rich-quick’ scheme or a form of gambling, so the staff at Orbex.com highlights just the four main elements needed for successful forex trading; analysis, knowledge, risk management, and vigilance on the movements of the market.
There are many misconceptions about the forex market and trading currencies. Just as with any investment, the promises of quick and easy money are too often circulated to the potential traders. Possibly one of the biggest misconceptions is that forex market is a get-rich-quick scheme and that great amount of money can be made with a small deposit and with a great large leverage. While large leverage can bring large profits, it can also carry big losses, which is by no means a quick way to get rich. Forex trading is risky and as long as traders and aspiring traders are aware of the risk, as well as the absolute importance of risk management, forex trading can be rewarding experience that can turn into a great source of income.
Those traders who are successful and who remain successful, are so because they understand the importance of discipline, knowledge, and risk management.
Forex is also greatly misunderstood in terms of what it actually means to trade foreign currencies. In many instances, forex is erroneously connected to gambling, when in fact, forex trading is just as any other investment, made by any other financial institution or an investment professional; it requires analysis, risk management, knowledge of the market, and vigilance on the movements of the market. As all these factors are taken into consideration when any other kind of investment is made, so is with forex. The only major difference between other investments and forex, is the ability for individuals to control their investment by themselves, rather than handing their money to an institution.
One of the hurdles faced by many new traders is the overwhelming amount of information on the Internet regarding forex trading, and especially, the technical analyses. For the most part, these educational materials are comprised of scattered pieces of information, in no particular order, which are very difficult for a non-experienced trader to decipher. For those without any previous trading experience, understanding the forex trading jargon and concepts tends to be overwhelming and tedious. As a result, many will launch themselves into trading without having the adequate knowledge and hope for the best. Many brokers offer some kind of academy or an educational center as an industry standard, but usually, the information provided is not clear and very seldom complete. Those institutions—and some brokers who provide educational materials—tend to charge for the access to them, leaving a majority of traders to fend for themselves.
Risk Statement: Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit. The high degree of leverage can work against you as well as for you.
By the staff of Orbex.com
