Forex Myths 10 That Cause 95% of Traders to Lose

By: Monica Hendrix
I have been a trader for over 25 years and the myths below are common ones and if you make anyone you will lose your equity and join the 95% of traders who lose.

Let’s look at these forex myths and why they will guarantee you lose.

1. You Can Predict The Market

This is a common myth and the bulk of novice traders think they have to predict where prices are going to succeed – wrong.

In forex trading if you predict you are relying on hope or making an educated guess and the market will kill you.

Never predict!

Always look for price confirmation. If for example you think a level of support will hold, wait for price momentum to turn up above the level and confirm it has held – then trade.

Also don’t believe the scientific methods sold on the net they don’t work.

If markets were scientific, we would all know the answer in advance and there would be no market!

2. You Can Make Regular Income Day Trading

You can’t make money day trading full stop – yet more new forex traders fall for this myth than any other.



All volatility in short time frames is random and support and resistance levels are meaningless, so you can never win

If you don’t believe me, ask a forex day trader for a real time track record over the longer term and you won’t get one – period.

3. You Can Buy Success

Forget all the vendors trying to sell you methods that will make rich (all for a few hundred dollars!) most of these guys have never traded in their lives and rely on hyped exaggerated copy to sell their systems.

To succeed you need to have confidence and discipline and that comes from within no one else can give you success – it comes from within and your own understanding.

4. You Should Keep Stops Close To Reduce Risk

All you will do is get stopped out by normal volatility and the same goes if you try to trail a stop to close.

To make money you need to take a risk.

Most forex traders want to restrict risk so much they guarantee they will lose.

5. You Should Diversify To Reduce Risk

If you are trading over 100k maybe, but if you are a small trader diversification will simply mean you dilute profit potential – To win you have to bet meaningful amounts.

I see vendors saying you should only risk 2% per trade well on $5,000 that’s $100!

If you risk that you won’t have much profit potential.

If you have confidence in your forex trading strategy risk 25% or more and have the courage of your conviction.

6. You can Listen and Act On The News

There is a lot of news you can get and it won’t help you.

It’s better today than it ever was, but the ratio of winners to losers remains the same.

If you try and trade off news stories, you’re chasing the market.

News is discounted in a split second and is discounted instantly by forex markets which are then looking to the future.

Investment
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 
 • 

» More on Investment
 



Share this article :
Click to see more related articles