4 Myths That Most Beginner Forex Traders Would Like to Believe

By Leo Dimilo

If you were to google the term "forex" you would get 57 million pages, most of which is complete garbage. Now I say this with a slight hint of reservation but understand that in the short 5 years of me trading on the FX market, I have come across outright scams, automated "systems" that supposedly would make an investor rich, gurus that profess huge returns if you allow them to trade using managed accounts, books that make outstanding claims ect. ect. The list goes on and on.

I am going to attempt to blow apart a lot of these "myths" that seem to circumvent the forex market online and hopefully, you will be able to use common sense when approaching these "products" and give you a solution that you can research to better help you with your trades.

Myth #1

You can easily double your forex account by using (stick a broker or site name here).

Reality- Any site or broker that can give you a fixed percentage per month (like 10%) is doing something with your money other than trading forex. That is the bottom line and it doesn't matter if you think that it must be real because the site has been paying for several months.

My own experience: I had a managed account with an unsaid site that was averaging 20% per month and had been in operation for a couple years. I was quite pleased with the results and then all of a sudden, they vanished into cyber space...along with my money. This was a lesson learned the hard way but I want to tell you that if it sounds too good to be true, then...it is too good to be true.

As an aside, there are thousands of sites that claim to be trading forex. Most promise returns upwards of 50-100% per month. It is simply not possible.

Myth #2

Automated Software is better than Human Based Trading

• I have heard this spouted about since I came online and started trading. The idea is this...by taking away the human emotion, you can make significant profits. Since Fear and Greed moves the market, a computer based product that just crunches numbers should be able to accurately predict the market.

Reality- Automated Software does not work because the market moves because of human greed and emotion....

Real life Example- a couple years ago, after seeing automated system after system touted, I finally took the plunge and bought some software that would make my trades automatic. Luckily for me, I tested the bot using a demo account because after a month's time, I would have gone broke. The bottom line is that a computer can only implement indicators, much like a human can.

As an aside, if someone developed a "bot" that could do the dirty work for you and succeed, why on earth would someone sell it? Think about it...if it is too good to be true, it normally is.

Myth #3

Trading the news is the quickest way to profits and even a newbie can do it.

Reality- While it is true that trading the news can result in some significant jumps in PIPS, it also has a few can of worms that most traders won't tell you about....

• Getting in on these trades has to be quick and most platforms perform typically slower than normal during these high volume times. The worst part of this is that you can't tell which brokerage firm is the better because the trades are seemless on demo accounts. The result is you get in trades but sometimes can't get out.

Real Life Example- I was subscribed to a service where the trader had a chat room in which trader's could come in. He had one of those fancy Reuters news tickers (that cost $2,500+) in which he could get the news at the exact same time that the banks got them. Basically, he would get the news and type "buy" or "sell" or "do nothing". When something hot broke, it would sometimes break for 60+ PIPS. That would have been great if I could have gotten in on the trade. However, I tried 5 different platforms and all of them were either very slow to open the trade (resulting in a loss of profit) or crashed at the time of the news....not good.

I investigated this and found that my problem wasn't just me. Other trader's had the same exact problem.

Now, my only way to combat this was to "guess" which way the market would go and place a stop/loss point on the other side just in case it went the other way. Then again...that is not trading...that is gambling...

Lesson learned: If you are going to trade the news, be prepared for some major frustration along the way.

Myth #4

You can make a lot of money consistently trading short term time frames (day trading)..

Reality- The key word is consistently. There are two things that are certain with trading forex. One, the market will rise....and two, the market will fall. With short time frames, you are basically guesstimating which way the market will go. And the market moves in these short time frames without much reason. In other words, it is no better than flipping a coin. Technical and chart analysis is absolutely pointless in these short time frames. If you don't believe me, spend a week watching these numbers and do all the chart analysis you want....Without knowing the long term trends, you are no more than a gambler betting red or black.

This said, there is only one PROVEN technical indicator in stock OR forex trading. And that is understanding retracements and how to chart using fibronacci techniques. Basically, it implies that when a market starts a pull back or rally, normally there are some keypoints that it retraces back to. The most important number is 50% (or the 50% retracement rule).

Now, I am not going to say that it is a slam dunk (there is none in trading). However, if you use history as an indicator, then you would see that the 50% retracement rule actually works more often than not.

Leo Dimilo has been trading forex as a hobby for 5 years now and has his share of bumps and bruises along the way. He has made alot of money AND lost a lot of money along the way.
Forex Trading for Beginners

Article Source: http://EzineArticles.com/?expert=Leo_Dimilo

Build Wealth in Forex

By Soli Kator

Forex trading is done without commissions and thus proves to be a hugely attractive opportunity for investors dealing on a daily basis. Clearly the immense leverage in global Forex trading is what lures a lot of players into the game. Before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience and risk appetite. There are lots of reasons why you should involve in Forex trading. When you enter the Forex trading market you will enter as a buyer or a seller of a particular currency. Remember, you can build wealth in Forex, but you can destroy it as well.

Now when studying your charts at the beginning of each trading session, the eye can easily pick up this free Forex signal and identify key levels of support and resistance and where price has already made attempts in the last few days to break through a previous high or low. A beginner education in Forex trading should not put your money at risk. Past trends do have their place in Forex trading as most traders will admit, and using the charts to track historical trends can assist a trader in making a snap decision.

Most of them refer that they are the team of professional financial investors who are experienced and talented in some kinds of businesses, the most mentioned are Forex (foreign exchange), which is always said to be the most profitable business nowadays, some invest in stocks, others in property. It can be called the domestic currency or accounting currency or even be termed as the primary currency of a Forex currency pair. There are few qualifications for becoming a Forex retail trader, so it is a good place for the budding investor to start.

Essential of Forex Trading Number 7: Keep an accurate and detailed log of all your good and bad trades. If you are a beginner in the Forex system here are the 3 things you must do in order to profit with Forex: Look into good a Forex tutorial. Simply type in a "beginners education in Forex trading" into a well known search engine like Google or Yahoo and you will be presented with scores of websites offering you step by step articles and also full downloadable e-books and e-courses on the subject.

Soli Katirhttp://www.solikatir.com/Forex-Enterprise.html Learn how to have a legit online business that puts real money into your bank account.

Benefits of Using Forex Software

By Milton Z. Ziegler

As the Internet grows in popularity, more and more individuals are learning about the benefits of trading currencies on the Forex market. In recent years, Forex trading has become known as a great way of investing money. But if you do decide that you want part of the action, you should do some quick research on the Forex software packages on the market. They can help you trade easily and from the comfort of your home and office.

One great benefit about Forex software is that it can perform many tasks for you, and keep you up-to-date on the values of the currencies you are trading. If you had to do these tasks manually, you would have to spend many hours fiddling with newspaper reports, charts and graphs. But with the push of a button, you can know how and when to trade. With a general knowledge of where the currency is heading, you can allow your trades to run, or stop them as your position reverses.

But not only does Forex trading software allow you to manage your funds, it also provides you with the opportunity to withdraw or deposit money into your Forex account when you need to. This means you can leave your money in an interest bearing account until you are ready to trade. This way, you earn interest on your money and avoid having extra money sitting idly in your trading account.

Also if you want you can set up the Forex software so when the currency drops to a certain level or has reached a specified value, then it will automatically sell it for you. By doing this you are not only minimizing your risks, but it also means that you do not need to keep a constant watch and control over your profits.

However the best way of ensuring the software you are buying is right for your needs is to test it before you start investing your hard earn money. A good Forex software package will allow you to practice with the software using play money while you learn. Then once you are comfortable with trading, you can deposit some of your money into a trading account and start trading. It is best if you practice as much as possible before. This way you will be ready for any losses that may occur in the beginning. From the start it is best if you only invest small amounts of money when trading until you feel more confident with the software.

Forex software comes either as a desktop or Internet based package. The Internet software systems have several advantages over the desktop versions. One of these advantages is that you do not need to deal with maintenance issues. The software seller often looks after these technical goings-on. Security is another issue you don't have to concern yourself with.

The seller will already have in place more security measures than you can afford on a desktop version. The systems offer data encryption on a secure server and will therefore protect you for hackers and thieves. Plus, Internet based systems offer you more convenience than a desktop model. You can check your account no matter where you are in the world. All you need to do is key in your login and password information. You can then view your currency trading account in a secured environment.

Get the latest in forex software know how from the only true source at http://www.forextradingline.com. Check out our forex software pages.