Tag: Forex Expectations

Categories
Beginners Forex Education Forex Basics

Forex Trading: Expectations vs. Reality – Part Two

Let’s be honest, we all came into trading thinking that we were going to be rich, that is simply the expectation that a lot of new traders come into trading thinking, they have seen all the advertising spells with the present but often hidden warnings about the number of people who lost money. Due to these adverts and people on social media, people feel that trading is easy and that they will make a lot of money very easily and very quickly Or there are those that know very little about it that see it as gambling or a risk to do. Both of these expectations come from what they see from the outside, yet when we get into the actual facts, things are very different in reality than they are in their expectations. We are going to be looking at some of the differences between the realities and expectations of trading.

Let’s be honest, we all came into trading thinking that we were going to be rich, that is simply the expectation that a lot of new traders come into trading thinking, they have seen all the advertising spells with the present but often hidden warnings about the number of people who lost money. Due to these adverts and people on social media, people feel that trading is easy and that they will make a lot of money very easily and very quickly Or there are those that know very little about it that see it as gambling or a risk to do. Both of these expectations come from what they see from the outside, yet when we get into the actual facts, things are very different in reality than they are in their expectations. We are going to be looking at some of the differences between the realities and expectations of trading.

Let’s be honest, we all came into trading thinking that we were going to be rich, that is simply the expectation that a lot of new traders come into trading thinking, they have seen all the advertising spells with the present but often hidden warnings about the number of people who lost money. Due to these adverts and people on social media, people feel that trading is easy and that they will make a lot of money very easily and very quickly Or there are those that know very little about it that see it as gambling or a risk to do. Both of these expectations come from what they see from the outside, yet when we get into the actual facts, things are very different in reality than they are in their expectations. We are going to be looking at some of the differences between the realities and expectations of trading.

The Work Involved

If you go onto social media you would get the impression that there isn’t really that much work to put in in order to make a bit of money, if you have watched a trading film, which is the only reference that a lot of people get, you will either think that there is an incredible amount of work or none at all. Either way, whatever your expectation is, it is probably wrong. Those coming into trading thinking that they won’t need to put on a lot of work will be in for a shock. There is in fact a lot of work involved. In fact, it can take a very long time to put on a single trade, if you want to be profitable then this won’t happen overnight. Instead, it will happen over months or even years for a lot of people. If you want to succeed then you need to ignore the idea that it is quick and easy and instead come to realize that you are going to have to put in a lot of time and effort.

Is It Gambling?

From the outside, forex trading can look like a bit of a gamble, let’s be honest, the markets will either go up or they will go down which makes it a 50/50 chance right? Pretty easy to guess then, well not exactly. The markets are influenced by hundreds of different things, each pulling the market in one direction or another, it is up to you to work out which way it will go. You cannot however simply guess, if you do that, you are pretty much guaranteed to lose overall. Instead, you are going to need to take your time to analyze all the different indications and influences of the markets. This will enable you to see which is the most likely direction that the markets will move in. This can then give you the best chance to trade correctly, so it certainly is not gambling. It is all about weighing up the different probabilities and then trading in the most likely direction.

Required Funds

Many people seem to be coming into trading thinking that they will be able to make a lot of money off a $100 account, this is simply not the case though. Much like with anything in life, you need money to make money, the larger your account is the more profits you will be able to make. Those adverts that are promising you that you will make $100,000 on a $100 account overnight are simply trying to scam you out of your money. If you want to make a lot then you will need to start with a lot. Otherwise, you will need to slowly build up your account over a longer period of time. If you have a $100 account then you can expect to make a few quid per week, not double it up every single week.

Winning Formula

There are hundreds of strategies out there, loads of variations of each one, so why some people come into trading looking for that magic formula that will make them profits all year round is very confusing. If there was one strategy that worked, then we would all be using it and all those other strategies simply would not exist. Not to mention the fact that if there was one strategy, the markets would simply cease to function, as everyone would be using the same strategy and putting on the same trades, meaning that the markets would come to a standstill. For this reason, there cannot be a single strategy that always works, instead, you need to learn a number of different ones in order to remain profitable all year round.

Is It Random?

The simple answer is no. The markets are far from random but they certainly look like it sometimes. From the outside it looks like they simply do what they want, moving up and down whenever they want for no apparent reason. When in reality there are a lot of different things that can cause them to be and to influence the way that it moves. Trader sentiment, news events, natural disasters, and economic data are just a few of the things that can influence it. When they do take effect, the directions and the effects can be predicted, however even though it can be predicted to a certain extent, it can also move out of sync, moving against what would be expected. This is why trading is not a guaranteed thing, while it can be predicted to an extent, it does have a very small essence of randomness to it, but not as much as it may look like from the outside.

Is It A Scam?

Another popular opinion amongst those that do not actually trade is that forex is basically a giant scam, it is full of people wanting to take your money and you can’t actually make any profits. The sad truth is that this is partly true, there are a lot of scammers out there, from traders, account managers, signal providers, and even brokers. There are ones that are there to simply take your money, but this is not what all of them are doing. There Are genuine people out there that are actively trying to help you to make money, there are some great brokers that are only there to help, signal providers offering genuine signals, you get the point. So while there are frauds out there there are also some great opportunities too.

Those are just a few of the expectations that we see people have and what is actually going on. There are some similarities in places, what we see is sometimes what we get, however, there are also a  lot of differences, once you actually get into trading you will come to find that there will be a lot of differences in what you experience compared to what you were thinking you were going to get.

Categories
Beginners Forex Education Forex Basics

Forex Trading: Expectations vs. Reality – Part One

When you tell someone about trading and forex, what do you tell people? Most likely you are telling them all the best things about trading, these good reasons are the reason why you trade in the first place after all. These stories that you are telling other people are what is creating an expectation in them of what trading and forex actually are. If you look anywhere on the internet, there will be people talking about forex and how much you can make, how easy it is, and how life-changing it is, very rarely do you hear horror stories or the opposite feelings. This creates a certain expectation from people outside of the trading circle, expectations that do not really match up to the reality of what trading is and what it involves. We are going to be looking at what some of the realities are when compared to the expectations that a lot of people have and seeing whether the general expectation is right, or if reality is completely different.

When you tell someone about trading and forex, what do you tell people? Most likely you are telling them all the best things about trading, these good reasons are the reason why you trade in the first place after all. These stories that you are telling other people are what is creating an expectation in them of what trading and forex actually are. If you look anywhere on the internet, there will be people talking about forex and how much you can make, how easy it is, and how life-changing it is, very rarely do you hear horror stories or the opposite feelings. This creates a certain expectation from people outside of the trading circle, expectations that do not really match up to the reality of what trading is and what it involves. We are going to be looking at what some of the realities are when compared to the expectations that a lot of people have and seeing whether the general expectation is right, or if reality is completely different.

When you tell someone about trading and forex, what do you tell people? Most likely you are telling them all the best things about trading, these good reasons are the reason why you trade in the first place after all. These stories that you are telling other people are what is creating an expectation in them of what trading and forex actually are. If you look anywhere on the internet, there will be people talking about forex and how much you can make, how easy it is, and how life-changing it is, very rarely do you hear horror stories or the opposite feelings. This creates a certain expectation from people outside of the trading circle, expectations that do not really match up to the reality of what trading is and what it involves. We are going to be looking at what some of the realities are when compared to the expectations that a lot of people have and seeing whether the general expectation is right, or if reality is completely different.

It’s Incredibly Easy or Hard

When all you hear about is the fact that people are making a lot of money or that people are making some great returns then it would make it seem like trading is easy, thousands if not millions of people are making money doing it, this is true, but they are putting in a lot of effort in order to get to that level, they did not simply sign up and then place trades in order to be successful, a lot of work needs to be put in. On the other hand, looking from the outside, it can look like it is incredibly complicated, with numbers all over the place, charts, indicators, and more. It can seem very complicated which would make it seem hard to do. When in reality, it is quite straightforward, it does take time and work, but it is nowhere near as complicated, most indicators are self-explanatory and when you actually start using them, they make a lot of sense.

You Need A Lot of Money

If you have watched any trading films, it would make it seem like you would need a couple hundred thousand to trade properly, and to be honest, this would be true if you went for a 1:1 leverage account. The thing is that a lot of brokers these days are offering far higher leverage. In fact, some go as high as 2000:1 which is a little extreme, but even the popular 500:1 makes it so that trading is far more accessible to the average person. Many brokers allow you to sign up with a minimum deposit of $10, which will allow you to trade, you would need a couple hundred to trade properly, still a far cry from the hundreds of thousand that you otherwise may have thought you would have needed.

Forex Is A Scam

When something seems too good to be true, then most people would consider it a scam, and many people see forex as too good to be true, a way of making money by sitting at home in your underwear. It is Perfectly understandable why people think that trading is a scam, but in reality, it is not. Yes, there are people who try to scam newcomers into trading or to take advantage of what they believe, making quick profits, but trading in itself is not a scam. It really is a way to make money at home, even in your underwear, but it takes time and effort, so don’t believe the huge and instant returns that are promised and work on your own trading. Oh, and you should also keep an eye out for those dodgy brokers, but choose a good one and you should be fine.

It’s All the Same

From the outside, all the different currency pairs look pretty much the same, the charts look pretty similar and they all work the same way. Fortunately, that is not the case, in fact, every single currency pair acts completely differently, they have different levels of liquidity, different levels of volatility and offer a new trading experience when compared to another. For this reason, it is recommended that you learn a single currency at a time, then move on to a new one, if you start with a load you will be confused and make losses. With so many different currency pairs to choose from, it ensures that trading will always be interesting and there will always be new challenges to look for.

The Gambling Aspect

For some trading and forex simply looks like a gamble, there are only two outcomes, after all, the markets will either move up or they will move down. While technically true, there is a lot more behind it than simply that. There are thousands of different things that can influence the markets. News events, natural disasters, Donald Trump tweeting something, or just other traders thinking the markets will move a certain way. You need to take all of this into consideration, once it has been analyzed you can work out the most likely direction of the markets, it is not simply a 50/50 chance of it moving one way or another. Some people do of course come into it and gamble, but they very quickly learn that you cannot be successful by trading that way.

Managing your expectations is vital when it comes to trading, many people come into it with expectations that are far too high, thinking that they can make a lot of money overnight, this just won’t happen. If you have your expectations in the right place then you will be in a much better place to achieve your overall goals. Managing your expectations is vital for a successful trading career.

Those are some of the differences in the expectations that people have compared to the realities of trading. From the outside forex looks like a very different beast than it is from the inside. You don’t really know what is involved until you are in it and when you are, your expectations will be quickly broken as you realize what it is really about.