Forex Trading - 10 Myths That Will See You Lose

By: Kelly Price
The statistics are 95% of traders lose money and here you will find the 10 biggest myths of forex trading believe any of them and you will lose to - so here they are...

1. Forex Prices can be Predicted

You will see lots of people who claim you should predict to win but that's simply hoping or guessing. The way to win in forex trading is to make sure you act on confirmation of momentum - combined with support and resistance.

2. Prices move to a Scientific Theory

Leads on from the above and the devotees of Gann, Elliot and Fibonacci perpetrate this myth.

Human nature is constant so price patterns repeat - yes they do, but not to a scientific theory. Forex trading is an odds game not a game of certainties.

If prices did move to a scientific theory we would all know the price in advance and there would be no market!

3. Day Trading works

You see them all the time scalp pips regularly and trade your way to a fortune - bad news is it doesn't work. Data in short term time frames is unreliable and support and resistance is meaningless - you may as well flip a coin.

4. Complicated Forex Trading Systems Work Better than Simple Ones

No they don't - simple systems work best as they are more robust in the face of ever changing market conditions.

If you add to many variables in you will have to many elements to break.

All the best trading currency trading systems are simple and yours should be to

5. The More I Trade The More Likely I am To Win

Not true at all. Trading is an odds game and you should only execute a trading signal when they favour you and that's not often. You get paid for being right not how many trades you make.

6. I can Learn From Losses

Yes you can - you got it wrong! This is nonsense, if you have a robust logical trading system then it will lose that's part of trading life you don't need to dwell on it.

7. The More Knowledge I Acquire The Better

In forex trading you doesn't get paid for effort you get paid for being right - Once you have a system that's it you don't need to do anymore - just trade it.

8. I trade News Stories and Get Expert Opinion

That wont help you - news is discounted instantly and you also cannot tell how humans will perceive the news so it's pointless trying.

Will Rogers once famously said "I only believe what I read in the papers" He was joking but loads of traders continue to trade in this way and lose.

9. Buying Low selling High is a Great Way to Make Money

If you believe this you will lose it involves prediction! Most market big market trends start from new market highs NOT market lows, so you need to learn to buy breakouts.

10 I bought an e-book from a vendor I will Follow him

You can and there are some good ones about but most are junk and sold by people who have never traded with meaningless simulations ad hypothetical trading records. Another problem is that to follow a system, you must understand the logic of it to have the confidence in it, to follow it with discipline.

Finally! - THIS IS VERY IMPORTANT!

Here is the question that separates the pros from the losers.

They can all answer it can you?

My trading edge is (defined)

A trading edge is what separates you from the losing herd.

If you don't know what it is and why it will make you win - you don't have one! You need to continue with your forex education until you have one.

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