The forex myths below are believed by 95% of forex traders and that's why they lose – if you want to win then avoid these forex myths.
1. You need to predict to win
No you do not. If you try to predict forex moves you're really hiring and guessing and you do not get rewarded for that in forex trading. You need to act on confirmation and trade the reality of a turn not just hope.
2. Markets move to a scientific theory
No they do not. This myth is perpetrated by vendors selling systems based upon Gann Fibonacci and Elliot. Of course if markets did move to a scientific law, we would all know the price in advance and there would be no market! Common sense really.
3. The More Knowledge I have the better
Not true. You need the right knowledge and even that is not going to help unless you can apply your forex trading system with discipline.
In forex trading you do not get rewarded for effort, you get rewarded for being right – in the execution of your trading signal. That can take 10 minutes or 10 hours but effort does not equate to success.
4. Discipline is easy
If you think following a currency trading system is easy you have never traded forex – it's hard, even for experienced pros. In fact, the only way you will ever do it is – if you understand your system how and why it works and have confidence.
This means not just following a system blindly – but understanding why it will lead you to currency trading success, when you hit a string of losses.
5. The more complicated my strategy the better
After all 10 indicators are better than 3 – Not true. It's a proven fact that simple systems work best, as there are fewer elements to break.
6. Buy low sell high is a great way to make money
If you believe that then you will miss the best trends that offer the best odds.
Because most major trends start and accelerate from new market lows or highs and you need to trade these breakouts.
7. Money management is easy all I do is place a stop
Placing a stop is not money management! You need to see money management in terms of risk to the overall account. Money management is critical to success yet most forex traders do it as an after thought.
8. I need to earn from losses
Well if you have a forex trading system, you are going to lose at some point. If the logic is soundly based on you learn nothing – just take it on the chin.
Once you have a trading system you're happy with you, do not need any more education you simply trade it.
9. Experts know best I will follow them
Not in forex trading. We have great newswires but there just stories reflecting the greed and fear of the majority. Will Rogers once said:
"I only believe what I read in the papers"
He was joking of course – but many traders read a story and think its gospel and forget markets always rally when the news is most bearish and fall when it's most bullish.
If the news helped traders a lot more would win and 95% do not they lose.
10. Day trading is a great way to make money
Really? Then why do you never see a forex day trading system with real time track record?
Because it does not work.
All short term volatility is random and forex traders get wiped out.
Again it's a good story and so is Harry Potter – but I do not believe I can fly!
Avoid day trading which ispetrated by sellers appealing to greed and naivety.
ONE FINAL POINT!
If you want to win you need to avoid the above forex myths and get a trading edge. A trading edge is something that helps you win and enter the elite 5% who make big gains and enjoy currency trading success.
If you do not know what yours is do not trade and all the above myths will NOT give you an edge – PERIOD.