Is Forex Trading a get rich quick scheme?
I am sure most of us have seen the Forex Adverts with the young professional bragging with his Ferrari or flying in his private jet, right? Unfortunately, these adverts are false and does not promote the correct image of Forex Trading.
Any real Forex Trader will tell you that Forex Trading is not a get rich quick scheme. However, with so many scammers out there it is difficult to convince people otherwise.
In this article, we will deal with some of the misconceptions about Forex Trading and try to give a more accurate representation of what it really is.
Why are there so many misconceptions about Forex Trading?
The culprit for majority of misconceptions about Forex Trading comes from false advertising. It seems like every second advertisement on social media is about some form of online financial trading.
Have you ever wondered why there are so many false advertisements about Forex Trading on the internet?
Well we think that most people would realise the answer to this question is money of course. There are so many scammers in the Forex industry that are making tons of money by promising people to get rich quick.
Normally these scammers are not even real Forex Traders themselves! The word that would best describe some of these scammers is the word Charlatan.
Now, before you ask, see the below description of what a Charlatan is…
Charlatan: “A person falsely claiming to have a special knowledge or skill”… (thanks google)
These fraudsters would normally show how they make thousands of dollars on single trades. Another one of their common gimmicks is to show pictures of themselves holding piles of cash…people are supposed to know better.
There is a very good reason why these scammers are so successful though. You see, there will always be people who are looking for ways to get rich quick.
If you are one of those people please stop hunting for that quick money making scheme. If it sounds too good to be true then it normally is!
Misconception #1 – People think Forex Trading will make them money quick
The first misconception about Forex Trading is that it is a quick way to make money. I think majority of beginner traders start of with this idea.
However, this is an absolute lie and could not be further from the truth! Forex trading is is one of the quickest ways in which people will lose money, not make money.
Most retail traders stand a much higher chance of losing money quick as opposed to making money quick.
Let us just use common sense here for a second. If it was really possible to turn $250 into $1 million in just a few month don’t you think everybody would be doing it by now?
Don’t believe the lies that social media is spreading about trading. If you want to make money quick then Forex Trading is not the choice for you!
Misconception #2 – People think Forex Trading is Gambling
This is very similar to the previous point, especially with regards to the psychological similarities.
The challenge with this misconception is that there are so many traders who are in fact gambling with their money.
This is especially true for people who risk big on their trading accounts in the hope of winning big. These traders might as well go the a casino and play roulette….
Sadly, it is this mentally amongst many traders that have made trading synonymous with gambling. However real trading has nothing to do with gambling.
Real trading comes down to numbers. Real traders make use of various Fundamental and Technical Analysis methods in order to identify trading opportunities with an edge over the market.
They weigh possible trading opportunities and select the ones which has a higher probability of moving in their favor.
Thus, trading is much more than just choosing red or black like on a roulette table.
Misconception #3 – People think Forex Trading is Easy
This is just another example of the power of social media. This is probably one of the biggest misconceptions about Forex trading.
I know I was defnitely guilty of this one when I started trading…
The idea that Forex Trading is easy has dealt considerable blows to the Forex industry.
Most beginner traders fail to understand that Forex trading is just like any other career. You do not become successful in any other career overnight do you?
Of course not! People who become experts in a certain career does not do so overnight. Experience is a process, and it is a process that cannot be forced or rushed.
There are so many things that professional traders cannot teach to beginner traders. The reason is because some things need to be learnt the hard way…
It takes time and dedication and commitment to become successful in any career. Similarly, to achieve true success in forex trading will take time because it is a challenging endeavor.
There are so many things that move the markets at the same time. Everything from Central banks, to economic news releases, to geopolitics, to equities to commodities and many more.
All of these variable plays a role in the way the market moves. Consequently, it takes time to get to know the market and understand how things work.
There is no quick way in this business. Forex trading is not easy and it will never be easy. If it was easy, everybody would be doing it.
Misconception #4 – People think Trading Robots is the answer
Trading robots are not the answer to trading success. We find it quite surprising that so many people get scammed out of their money with robots promising endless wealth.
No trading robot will trade consistently successfully and profitably over time. The financial markets are just too complicated and intricate.
Some say the use of robots are useful as they neutralise the effect your emotions have on trading. Even though this is true, emotions are not always bad in trading.
Sometimes, emotions can be a great help in your trading if you know how to manage it properly. However, we will leave emotions for another article.
As we were saying, trusting robots to trade for you can be very dangerous.
There are other more useful things robots can be used for in trading.
Many traders use robots to help them in their trade management by calculating proper positions sizing etc. For these purposes robots are excellent.
However, when it comes to actual trading, we would not trust our own funds with trading robots.
Misconception #5 – People think they don’t need forex training
The amount of people who are interested in Forex Trading are growing by the day. Interestingly, majority of new traders think they will be able to trade successfully without getting any form of training.
Most beginners think they will triumph over the market by just reading free stuff they found on the internet. I was one of these people very long ago.
However, we soon realised that trading requires skills and methodologies which you will not find on the internet. The intricate knowledge required to trade the markets successfully are not given away for free.
People who have attained success in their trading have done so after many years of trial and error. Majority of successful traders all received training from someone who traded successfully themselves.
Don’t get us wrong, there are plenty of free sources on the internet which provides amazing content. However, someone needs to show you how to put all that info to work in a structured way.
Think of Forex training as an investment in your new career. If someone is not willing to invest in forex education then trading might not be for them.
If you wanted to start any new career you would need to learn from other professionals who are already doing it successfully.
It is the exact same thing for trading. If you call an electrician to fix the wiring in your roof, would you want to use someone who watch a few short 10 minute “how to” videos on Youtube?
Of course not! You would want a professional. Someone who knew what they were doing, right?
In the same way, you can learn more about the basics of Forex for free on the internet.
However, it won’t give you the hands on skills and knowledge that you require to be consistently successful and profitable.
Is it really possible to trade the markets successfully?
Yes, it defnitely is. However, realizing that Forex Trading will not make you rich overnight is an important first step.
Statistics say majority of retail traders never achieve consistent success in trading. Those who are part of the small percentage that are successful are those who have put in the time, dedication and commitment to get there.
It is possible to trade the forex market successfully, but it won’t happen overnight and it won’t be easy. Don’t listen to the false advertisements that promise you instant riches, it does not work that way.
Any real trader will tell you that trading is not as glamorous as some of the scammers wants you to believe. It is hard work. It takes time. It means sacrificing insane amounts of time studying the markets.
Also, trading can be very lonely. Most days, it is just you and your computer screens with the news squawks as your only company.
Making a success in trading is possible, but make sure you are up for it because it will be a bumpy ride.
There is no doubt that Forex Trading can be a very lucrative business venture for the entrepreneur. Especially one that is willing to put in the effort to make it work.
The forex market has a very unforgiving nature. Thus, a career in trading is definitely not for everyone. Feel free to check out another article on our website that helps readers figure out whether Forex trading is the right choice for them.
The Forex industry can be very rewarding for those that are clear minded and dedicated. For those who realize that money does not grow on trees.
For those that approach their trading like they would approach any new business venture, with time and commitment. We hope this article has been able to convince some that Forex Trading is not a get rich quick scheme.
Unfortunately, there are many that give the industry a bad name, so please be careful with your money. As a final caution, do not open up a Live Forex Trading account until you have received good proper forex training.
We advise starting with a demo account until you can make consistent profit before you even think about risking real money.
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