There’s a lot of speculation out there when it comes to forex trading, especially coming from people that have never tried it before. Many of the myths you hear make trading sound like a bad investment. On the contrary, trading may not be for everyone, but it can be a good investment under the right circumstances. If you’ve been considering opening a trading account but you’re feeling a little worried, allow us to debunk some of the most common rumors you might have heard below.
Myth #1: It’s a Scam
You might have heard stories online or even from close friends or family members that claim forex trading is a scam. The truth is that some industry regulations do make it possible for scammers to prey on those that don’t know a lot about trading, however, this gives the trustworthy brokers a bad reputation. There are many good brokers out there that are regulated by government agencies, meaning that they are held to a higher standard. It’s important to do thorough research before selecting a broker by checking out their regulation status and reading customer reviews online. As long as you go with a trustworthy, well-known company, you won’t have to worry about being scammed.
Myth #2: It’s too Expensive
You might assume that it takes a lot of money to get into currency trading, however, many different brokers will allow you to start with as little as $10. From there, you aren’t obligated to continue making deposits to your account. Do know that some brokers ask for steeper deposits around $300 or more, or a broker might ask for a larger deposit for a certain account type that they offer. Still, trading can be inexpensive and there’s no reason why you can’t start small. Just know that the amount of your profits depends on what you invest, so don’t expect to make a living off of a $100 deposit.
Myth #3: It’s Time Consuming
Some trading strategies do take more time than others, for example, a scalper might enter several (or hundreds) of trades per day, which obviously requires a lot of time in front of the computer. On the bright side, those that don’t have the time to invest can simply stick with a strategy that is less time-consuming, like swing trading, which involves opening a medium or larger trade and allowing it to accumulate for days or even weeks.
Myth #4: It’s too Risky
It’s true that trading can be risky, however, there are many things you can do to make it safer for yourself. Starting out with a solid education and understanding of how trading works is one example, while only risking a certain amount on each trade is another good way to limit your risk. The amount you risk comes down to personal preference and can be changed later on, so there’s no reason to feel like you’re being forced to put more money on the line than you’d like to.
Myth #5: Trading is too Complicated
If you jump right in and open a trading account without spending any time researching trading in general, then you’re likely to feel confused or overwhelmed. Fortunately, the internet is filled with free resources that will teach you everything you need to know. Some beginners just don’t want to spend the time learning, so they write trading off as being overly complicated and give up. As long as you’re willing to put in the effort, there’s no reason why you can’t use the internet to prepare yourself for a trading career.