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Debunking Myths About Forex - Investment - Nairaland

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Debunking Myths About Forex by smeag0l(m): 4:56pm On Apr 27, 2021
Good day everyone,
I have been trading forex for a while now and I just want to put this out there based on my experience with forex trading. Meanwhile, my inspiration for creating this post is the comments i've read on several forex-related posts on how it is a scam, designed to make you poor etc.Also,before you make judgements on my position do note that I've traded the capital markets for years and with thousands of dollars and have lost a lot at the beginning before breaking even and then between december last year and now, I'm in a meagre net profit of about $3,000 in trading(Yes, I have a trading journal I use to keep records of trades!).

So, I'll be explaining what forex is and what it is not in the next few outlines.
1. Forex is not a get-rick-quick scheme. It can make you rich, however, it requires discipline, determination/doggedness and hard work.
2. If you are not willing to leave your 9-5 job and dedicate your full time to forex then don't expect to make enough money(or even some money at all) from it.
3) Do not trade on a live forex trading account without a trading plan. It will just amount to pouring money into the ocean. Please send me that money if you have an abundance of it!Even if you're being profitable at the moment, without a trading plan you will lose all your profit together with your capital. I have been in this situation before.
4) Forex is not something you venture into with the aim of making quick cash to settle some needs. It will end in tears if you do this.
5)Forex is not a scam. It is very profitable if you know what you are doing. What is a scam in the world of capital markets are the numerous marketers asking you to bring your money so they can trade for you or buy trade signals or to attend forex tutorials for a fee. If those people were making profit, they wouldn't be asking for your money. Rather they will trade with theirs. If you need to learn forex trading go to babypips.com. Do not pay for trading signals. Learn enough, trade on a demo account for months , create a trading system or systems and a trading plan, determine which of your systems are profitable, stick to our plan. Do all these while trading on a demo account and if you are consistently profitable after three months, then you can open a live account.

6)Forex is a zero-sum game. This means , if one person is losing(usually the retail trader)another is gaining(usually the institutional trader).Between 5%-28% of retail forex traders are profitable. However, 80% of institutional trading companies are profitable. This, however, does not insinuate any manipulation as no single institution is big enough to manipulate the forex markets.

7) I have seen several adverts on nairaland here on different signals and trading systems and different forex tutorials on how to trade. However, let me shock you- Your trading skill all by itself will not make you profitable. What makes people profitable are a combination of three things-Trading skill/strategy/plan(20%), your trading psychology(30%) and your risk management/money management rule(50%). The percentages show their weight of contribution towards a trader's profitability.

cool There are people who study forex trading as a course in institutions of learning and people who take forex as a 9-5 job. This shows that it is a serious business. If you are not willing to attach a high level of seriousness(the type you'll attach to your career development) to forex, do not even venture into it as you will be included in the statistic of the 73%-95% losing traders.

9)Not all forex brokers are there to cheat you. However, you need to pay attention to your choice of broker as this can also contribute to your either being profitable or not. There are brokers that use things like slippage, stop hunting, significant increase in spreads while a trade is being executed,price requotes and withholding your withdrawals. Read broker reviews before you make your choice. I'll talk more about forex brokerage in the next and last point.
10) There are two kinds of forex brokers. A-list and B-list brokers. A list brokers are those that use the straight through processing(STP) or Electronic Communication Network(ECN) method. They match you with big financial institutions who take the opposite side of your trades. These brokers want you to win and are not dubious as the only thing they gain is the spread costs. They also offer low leverages which is to the advantage of the trader. B-list brokers, on the other hand, take the opposite side of your trades. Most of these guys(especially the non-regulated ones) are the ones that use the devious means mentioned above to rip traders off their money. They also offer high leverages to help you lose your money fast.

In summary, you need to determine you aim for trading forex, work hard in learning and make a plan for yourself in order to be a profitable trader. I hope this hits front page so that people can get the necessary financial education on the most liquid arm of the capital markets.

2 Likes

Re: Debunking Myths About Forex by Donvic4u(m): 6:17pm On Apr 27, 2021
Well said bro
Well said

Re: Debunking Myths About Forex by cj4humanity: 9:45pm On Apr 28, 2021
The hard bitter truth
Re: Debunking Myths About Forex by adejide2: 2:56am On Apr 30, 2021
cj4humanity:
The hard bitter truth
Please what do you know about addyflex and avatrade, are it among the a list?
I invested with tonso elite, it's website page has refused to go, is it possible to get my investment from it.
Thanks
Re: Debunking Myths About Forex by SavageResponse(m): 11:08am On May 02, 2021
smeag0l:



Thank you for taking out time to make these clarifications.

The most important point to be noted is that truly profitable forex traders do not have the time to be chasing people around for training fee or deposits for trading.

Lalasticlala please send this to front page, I will buy you snake meat pepper soup grin
Re: Debunking Myths About Forex by Itohanmiwa: 1:43pm On May 02, 2021
Forex is a nice way to make some passive income provided you are not the greedy type. With patience and constantly being online you will be surprised how much you can learn and earn with forex. But like you rightly said it's very dangerous to trade live without proper practice on demo. Also knowing when to enter and exit a trade cannot be over emphasized.

1 Like

Re: Debunking Myths About Forex by Itohanmiwa: 1:44pm On May 02, 2021
smeag0l:
Good day everyone,
I have been trading forex for a while now and I just want to put this out there based on my experience with forex trading. Meanwhile, my inspiration for creating this post is the comments i've read on several forex-related posts on how it is a scam, designed to make you poor etc.Also,before you make judgements on my position do note that I've traded the capital markets for years and with thousands of dollars and have lost a lot at the beginning before breaking even and then between december last year and now, I'm in a meagre net profit of about $3,000 in trading(Yes, I have a trading journal I use to keep records of trades!).

So, I'll be explaining what forex is and what it is not in the next few outlines.
1. Forex is not a get-rick-quick scheme. It can make you rich, however, it requires discipline, determination/doggedness and hard work.
2. If you are not willing to leave your 9-5 job and dedicate your full time to forex then don't expect to make enough money(or even some money at all) from it.
3) Do not trade on a live forex trading account without a trading plan. It will just amount to pouring money into the ocean. Please send me that money if you have an abundance of it!Even if you're being profitable at the moment, without a trading plan you will lose all your profit together with your capital. I have been in this situation before.
4) Forex is not something you venture into with the aim of making quick cash to settle some needs. It will end in tears if you do this.
5)Forex is not a scam. It is very profitable if you know what you are doing. What is a scam in the world of capital markets are the numerous marketers asking you to bring your money so they can trade for you or buy trade signals or to attend forex tutorials for a fee. If those people were making profit, they wouldn't be asking for your money. Rather they will trade with theirs. If you need to learn forex trading go to babypips.com. Do not pay for trading signals. Learn enough, trade on a demo account for months , create a trading system or systems and a trading plan, determine which of your systems are profitable, stick to our plan. Do all these while trading on a demo account and if you are consistently profitable after three months, then you can open a live account.

6)Forex is a zero-sum game. This means , if one person is losing(usually the retail trader)another is gaining(usually the institutional trader).Between 5%-28% of retail forex traders are profitable. However, 80% of institutional trading companies are profitable. This, however, does not insinuate any manipulation as no single institution is big enough to manipulate the forex markets.

7) I have seen several adverts on nairaland here on different signals and trading systems and different forex tutorials on how to trade. However, let me shock you- Your trading skill all by itself will not make you profitable. What makes people profitable are a combination of three things-Trading skill/strategy/plan(20%), your trading psychology(30%) and your risk management/money management rule(50%). The percentages show their weight of contribution towards a trader's profitability.

cool There are people who study forex trading as a course in institutions of learning and people who take forex as a 9-5 job. This shows that it is a serious business. If you are not willing to attach a high level of seriousness(the type you'll attach to your career development) to forex, do not even venture into it as you will be included in the statistic of the 73%-95% losing traders.

9)Not all forex brokers are there to cheat you. However, you need to pay attention to your choice of broker as this can also contribute to your either being profitable or not. There are brokers that use things like slippage, stop hunting, significant increase in spreads while a trade is being executed,price requotes and withholding your withdrawals. Read broker reviews before you make your choice. I'll talk more about forex brokerage in the next and last point.
10) There are two kinds of forex brokers. A-list and B-list brokers. A list brokers are those that use the straight through processing(STP) or Electronic Communication Network(ECN) method. They match you with big financial institutions who take the opposite side of your trades. These brokers want you to win and are not dubious as the only thing they gain is the spread costs. They also offer low leverages which is to the advantage of the trader. B-list brokers, on the other hand, take the opposite side of your trades. Most of these guys(especially the non-regulated ones) are the ones that use the devious means mentioned above to rip traders off their money. They also offer high leverages to help you lose your money fast.

In summary, you need to determine you aim for trading forex, work hard in learning and make a plan for yourself in order to be a profitable trader. I hope this hits front page so that people can get the necessary financial education on the most liquid arm of the capital markets.

What strategy do you use bro? Do you set stop loss or take profit and how do you know when to enter the market. I am learning keenly.
Re: Debunking Myths About Forex by Timmyspy(m): 7:14pm On May 02, 2021
I enjoyed reading your write-up I started learning Forex trading myself February this year. For the first two months I studied about 7-10 hrs daily. Opened a demo account last March and still trading demo trying to get a system that works for me and I can use consistently. I've set targets for myself that I need to meet before going live with a micro account on hotforex. I mostly prefer price action trading used with a few indicators for confluence. I also prefer swing trading. Any other words of wisdom for an Aspiring swing trader?

2 Likes

Re: Debunking Myths About Forex by smeag0l(m): 12:09am On May 04, 2021
I have several strategies that make up my trading plan and it depends on the instruments I'm trading. The strategy I use for trading commodities like gold is different from the one I use in trading major currency pairs(USD pairs) and it is different from the one I use in trading minor currency pairs(currencies excluding USD but including seven other most powerful currencies in the world). However, I use stop losses in all my trades and my stop loss settings depends on the amount of money I'm willing to risk on a particular trade(I generally risk 1% of my equity per trade).
Itohanmiwa:


What strategy do you use bro? Do you set stop loss or take profit and how do you know when to enter the market. I am learning keenly.

2 Likes

Re: Debunking Myths About Forex by idtwo: 9:57am On Nov 02, 2021
Pls OP continue with the thread.
Re: Debunking Myths About Forex by smeag0l(m): 2:16pm On Dec 18, 2021
There are a lot more things to add and I wish I had the time.
idtwo:
Pls OP continue with the thread.
Re: Debunking Myths About Forex by skylane(m): 9:51pm On Dec 18, 2021
smeag0l:
There are a lot more things to add and I wish I had the time.
forex is patience as patience is forex,he who controls his emotions rules forex for life
Re: Debunking Myths About Forex by Innomama7(m): 6:47am On Dec 19, 2021
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