If you search “forex trading” on any search engine, you’re going to find a lot of frequently asked questions from users that doubt trading is profitable. For example:
- “Is forex a scam?”
- “Can you really make money trading forex?”
- “Is the forex market illegal?”
- “Is it really worth becoming a trader?”
As you can see, a lot of people online seem to feel apprehensive about opening a trading account thanks to online myths and speculation or stories about traders that have lost money. Sure, it is possible to lose money and there are scammers out there, but you shouldn’t let these common excuses keep you from trading:
Excuse #1: I Don’t Have Money to Invest
Many people want to start trading forex, but they imagine that the luxury is reserved for those that have a great deal of money to invest. In reality, you can get started trading on a demo account for free. It’s also possible to open a trading account with only a few dollars through a wide variety of brokerages, so you shouldn’t let a lack of money keep you away. Of course, you should expect to be limited to a micro, cent, mini, or standard account if you only have a small investment, but these accounts are actually beneficial for beginners. These accounts might not offer as many perks as elusive VIP accounts but they will allow you to trade, hone your skills, and make profits, nonetheless. Just remember not to invest more money than you can afford to lose – if it’s meant to pay bills or live on, don’t deposit it into your trading account.
Excuse #2: I Don’t Have the Time
It’s true that some traders sit in front of their computer screen constantly entering and monitoring positions, but you don’t have to do this. In fact, there are many different strategies that benefit part-time traders that have other things going on in their lives. Swing trading is one example where you enter trades and let them go for days or even weeks in some cases. The flexibility of being able to trade from any device with an internet connection even makes it possible to monitor your account while you’re on your lunch break or from your child’s soccer game. It might seem like another annoying thing to keep up with, but it’s worth it when you think of how much money you could make if you carve out a little bit of time each week for trading.
Excuse #3: It’s too Risky
Forex trading is an investment, meaning that there is risk involved, not unlike other investment opportunities. You really do have to give money to make money, but you shouldn’t think of trading as gambling. Before you ever start, you should have a good concept of what moves the market and how trading works. Then, you’ll develop a trading plan that tells you what to look for when it comes to entering and exiting positions, along with plans for managing your risks, and so on. All of this is designed to keep you safe if things go against you, although they don’t eliminate the risk of losing money entirely. Still, with a solid trading plan and background knowledge of what you’re doing, your risk will be significantly reduced.
Excuse #4: It’s too Complicated
This excuse seems to come from people that just don’t want to invest the time into learning to trade. Sure, there are a lot of things you’ll need to know about, like terminology, how to work a trading platform, factors that affect prices, trading psychology, and so on. However, it’s wrong to say that these topics are complicated to learn. All of this information can be accessed online for free and you can even try learning through different resources if you have trouble understanding a certain topic. For example, some might learn better by reading articles, while others might prefer to watch videos. Some authors can also do a much better job of explaining concepts than others, so there’s no reason to give up.
Excuse #5: It’s a Scam
This myth likely comes from the idea that most brokers are scammers just waiting to steal your hard-earned money. As we mentioned earlier, there are some scammers out there, but there are a lot more reputable brokers than there are scammers. If you want to ensure that you’re opening an account with a trustworthy company, try following these steps:
- Check to see if the company is regulated. (Double-check that the listed regulation company exists and check for a license number, as some scammers will post pretend regulation details. Also, if you’re located in the US, you might have to go with a company that isn’t regulated.)
- Look at the broker’s website. Does it tell you in detail about the accounts they offer, available funding methods, applicable fees for funding, spreads, and commissions, etc.? Or are you left with more questions than answers? A detailed website is a sign of a good broker, while a lack of information suggests otherwise.
- Read through the broker’s terms & conditions to ensure that there aren’t any crazy policies or hidden fees, like inactivity charges.
- Look for customer reviews online. More popular brokerages will have a lot of feedback, while scammers may not have any at all or everything will be negative. Remember that some traders that have lost money at their own fault might leave bad reviews regardless.