There are many myths that surround the trading of forex. A lot of it is due to the advertisements on internet and media about how easy it is to trade forex and the quick money traders can make. There are also attempts to pitch it such that it is much less risky than trading in stocks or commodities but at the same time more profitable.
It is important to note that this myth has to be exposed and seen for what it actually is. Currency trading or trading in the currency market is as risky if not more and as the saying goes, there are no free lunches anywhere. You cannot make quick money doing currency trading just as you cannot when trading stocks or commodities. Many traders in their enthusiasm to get into it have had to undergo huge losses and the advertisements appearing on media are just part of a big scam to induce people to trade. Having said the above, you can make money on currency trading if you are able to track global developments on the economic, political and financial fronts and are savvy to quickly take positions or exit them. You cannot just get into currency market without having a good enough understanding of how currencies move, who the big players are trading in this market and the influencing factors that drive this market. Once you get a decent fix on the above, you then can scout for a broker who has been in the business for long and who can offer you advice initially on how to go about it. The trick is not to leverage heavily in the beginning but make small trades to test the waters. Once you are more confident about the market and how it works, you can place bigger trades. Whether it is stocks, commodities or the currency market, when you get into heavy leveraging, you expose yourself to much greater risk if the trade turns against you. Conversely, the rewards can also be big but unless you have deep pockets and afford to lose big, it is better not to do currency trading through heavy leveraging. It is also advisable to begin currency trading only through legal sites and brokers so that you do not end up contravening the law of the land. Do not succumb to advertisements that do not present the true picture.
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September 2017
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