A lot of novice traders, having seen information about how much you can earn on Forex in a year, harbor many illusions that later turn into disappointment.
These people leave the market after losing their money on it, with a feeling of resentment and a false idea that it is impossible to make money. Similar convictions also occur among traders with a certain trading experience.
Forex is Scam
There are indeed a lot of fraudulent companies in the forex industry. But there are also quite a few honest and reliable companies.
Fraud is when you are promised something in advance, and then you are deceived.
Of course, every broker has advertising materials on the website that tell you how much money you can earn in Forex. But, firstly, it is possible to earn a profit on Forex. Secondly, all such materials are necessarily accompanied by a warning about risks, communicated to the client that this is a high-risk business. Higher profit means more risk; otherwise, it does not happen.
Unfortunately, from time to time, fraudulent fly-by-night companies appear on the forex market, created to deceive customers and embezzle their money. Previously, there were many such companies, now they are incomparably fewer, but they do exist. People who have suffered in such companies are the most active in spreading the myth “Forex is a scam.” With all the sympathy for them, it is the same as if the defrauded real estate investors, from whom the fraudulent construction company took the money and, without building the promised housing, disappeared, thundered on the forums that any construction company is a fraud. Or as if agriculture was declared fraudulent by those to whom potatoes were slipped and spoiled in the store.
It is noteworthy that most people who consider Forex to be a scam are completely lost when asked to name something that is not a scam. Because the first thing that comes to mind as an alternative to business is being employed and the hope of a decent retirement.
A Broker Can Cheat
Technically, the broker does have such an opportunity. In the same way that the Mercedes can produce low-quality trash cars, Intel can make defective computers, and any hairdresser can turn a client into a bogeyman. But for some reason, none of them takes advantage of this opportunity.
Bad cars won’t buy. They will stop going to a bad hairdresser. Similarly, traders should run away from a bad broker to a good one.
The manipulation in price quotes is impossible to hide and can be easily detected. As soon as the broker does this, there will be a lot of noise on all forums. The broker spends a lot of money on advertising and maintaining a good name. Will a regulated broker create black PR for itself?
That’s why it is recommended to go for a highly regulated broker and never fall victim to any shady or unregulated broker.
Initial Size of Capital
The value of the initial deposit undoubtedly affects the earning potential. Without basic knowledge and trading experience, any beginner with a passionate desire to make a profit will lose his money in the shortest time. Therefore, it is better to start trading with small volumes. When faced with the first setback, they should carefully analyze the trading statement to find the cause of losses. Only then can the trading volumes be increased.
However, you do not need too big capital to start trading because several brokers allow you to start a very low minimum deposit. Moreover, PAMM and social trading accounts can resolve your problem of shortage of initial investment.
Forex is Gambling
This means that it is impossible to predict the market, which means that the profit in Forex depends only on chance.
If the market were easily predictable, then Forex would not exist because every newbie would become a multibillionaire in two or three months. Some traders believe that the market is unpredictable. Others believe that it is sometimes predictable and sometimes not. But this issue is rather of theoretical interest and has nothing to do with a real trade.
You don’t need to be able to predict anything. You need to calmly accept a small loss when the trade is unsuccessful and make a significant profit when it is successful. The goal of a professional is not to make as many profitable trades as possible but to take a statistical advantage over the market. A professional trader does not know how the next trade will end; he does not know how much he will earn or lose in a week, but he knows that he will eventually profit after twenty or thirty trades.
You can get an advantage over the market, but you cannot get an advantage over roulette. The hardened player and the beginner have equal chances in front of the roulette wheel. In this sense, it would be more accurate to compare Forex with playing backgammon. It is impossible to know in advance how the dice will fall and how the cards will fall – and yet the experienced player will always have a huge advantage over the beginner.
95% Traders Lose Money
In any industry, beginners do not immediately succeed. This figure is rather arbitrary. It wanders from mouth to mouth, from book to book, from forum to forum. Nobody knows the exact figure. But that the vast majority of beginners lose their first deposits is an undeniable fact.
What is the myth, if so? The myth is that when this magic number 95 is once again announced on a forum or in a private conversation, it seems to be implied that only in Forex the percentage of those who have achieved success is so small. Still, in other areas fields of life, it is much higher. But let’s ask the question, is it higher?
Take any institute, first-year students – how many of them will become doctors? How will many children involved in the sports become Olympic champions? Or at least just masters of sports? How many graduates of military schools will reach the rank of general? What percentage of young specialists in the institution will make a career grow to VIP managers and executives? Finally, how many newly created firms go bankrupt in ordinary business in the first two or three years? About the same 95%. So working in Forex in this respect is no different from other professions.
Any upcoming champion will have setbacks and failures at first. Everything needs to be studied hard – and working in Forex too. Forex, in this respect, is even easier than other fields as you can learn and practice on small deposits and even on demo accounts, where money is virtual.
The desire to make a profit without acquiring knowledge is akin to playing at a casino at random. A beginner can get lucky for a certain time. However, subsequently, unambiguously, luck will be replaced by losses and disappointment. Only the acquisition of knowledge, their regular replenishment, will bring the desired result. Even the initial training in trading is not a guarantee of success in trading. Perseverance and hard work is the key to further earnings. Usually, the period for reaching an already stable profit is approximately equal to a year.
Brokers May not Process Withdrawal
Withdrawals take place in one day, depending on your payment mode. The earned profit is automatically recorded on the platform. To receive your money, you fill out the withdrawal form and get your profit in your bank account or in any other way convenient for you.
Some Tips for Forex Traders to Become Succesful
After burstin the common myths in Forex, let’s share some great tips that can help you become successful.
- Invest money you don’t need to live on – Forex is a high-risk market, so don’t borrow money to trade.
- The best investments are often the simplest – don’t put your money on tools you don’t understand.
- Risk and volatility are not the same, volatility in financial markets is normal, and risk is when you don’t know what you are doing.
- Feel free to miss – even the best traders have losses. The key to success is understanding how to cut your losses and make a profit.
- Be patient and do not give in to stress – analyzing prices requires patience and a certain coldness in judgment.
- Choose a regulated online broker – there is no point in making money if you cannot withdraw it.
- Develop a simple strategy and test it