This article was first published by Deriv on 4 August 2022.
You’ve probably come across plenty of information about forex trading — some accurate, some misleading. Not everything you read or hear about this market is true. In this post, we debunk common forex myths to help you decide whether trading currencies is right for you.
Myth 1: You need a lot of capital to trade forex.
Fact: Many forex brokers, including Deriv, let you start trading with minimal capital.
In the past, forex was mostly reserved for large banks and financial institutions with significant funds. Today, anyone can trade forex thanks to electronic platforms and a fast internet connection.
On Deriv, you can begin trading with minimal capital and even open a free demo account loaded with virtual funds to practise your skills risk-free before committing real money.
Myth 2: Currency trading is the same as gambling.
Fact: Forex trading is based on probabilities and analysis, not luck.
Traders study price movements using technical charts and fundamental data to make informed decisions about currency performance. You predict when to buy or sell to maximise profits.
Gambling, by contrast, relies purely on chance. The house usually has the advantage, meaning the odds are stacked against you. Forex trading removes this imbalance because decisions are guided by data and strategy, not luck.
Myth 3: The forex market is manipulated.
Fact: Due to its enormous liquidity and daily trading volume, the forex market is extremely difficult to manipulate.
While governments and large banks influence currency values, this does not mean they control market movements. With over $6 trillion traded daily in 2023, forex is a global market influenced by macroeconomic events and diverse traders, making it highly liquid and resistant to manipulation.
Myth 4: You can’t beat experienced traders.
Fact: You can — you just need to play smart.
Experienced traders may have more capital and advanced tools, but that doesn’t prevent you from finding your edge. The key is to identify a niche or strategy that’s less crowded, giving you the potential to profit where others may not.
Professional traders have strategies that suit them, whether they focus on long-term positions or intraday trades. Discovering your own approach can level the playing field.
Myth 5: Trading forex is easy.
Fact: Like any market, forex trading is challenging and carries risk, especially when using leverage.
Higher leverage increases both potential gains and potential losses. However, risk management tools can help protect your capital. On Deriv, you can trade forex via CFDs, options, and multipliers.
- CFDs allow you to set stop loss and take profit orders to limit losses.
- Options let you earn a predetermined payout if the market moves in your favour.
- Multipliers protect your stake with automatic stop-out.
Trading forex strategically can diversify your portfolio, but success depends on separating facts from myths. Stay informed, follow market trends, and make decisions based on research rather than hearsay.
If you want, I can also make a more concise, reader-friendly version for a blog post that keeps it engaging while trimming the length. Do you want me to do that?
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