Forex is enveloped in myths and delusions. Having no idea about currency market functioning and work mechanisms people ascribe to Forex and trading such things that do not quadrate to facts. Let us consider the most widespread legends.

1. Forex is a complete deception.

Another variant of this phrase is: “Forex is a casino where nobody wins”. There is a suggestion that it is impossible to earn on price fluctuations, and brokerage companies are trying to put a spoke in their clients’ wheel.

A proof that this is far from being the case is brought by successful traders experience, as for them Forex has become the main source of income. We have already written that sometimes there can emerge unfair participants as well. However, their tricks can be seen through easily, if choosing the appropriate broker. There are quite many respectable companies in the market rendering good trading terms and great service – all you need is to examine the necessary information in order to take the right decision.

Worth remembering that brokerage company affords the private traders an opportunity to trade in an interbank market, offering various instruments and encouraging its customers with bonuses, campaigns etc., but that does not guarantee profit receiving finally. If you want your trading to be of success – you have to devote energies by yourself.

2. Forex requires a huge capital.

Those times when access to currency and stock markets was open for the high and mightiest only have passed. Today anyone willing may start trading and there is no huge capital required for that. No doubts that with a big deposit the work would be more effective, but you can begin with a few dollars. Modern brokers offer different account types – even cent accounts, contests and bonus programs, taking part in them it is possible to make a starting capital.

3. Forex involves a great risk.

To some extent it is really so. But it is enough to have just a little of sanity to avoid most of them. Do not put your last money into trades or the money which you borrowed. Follow the rules of money management, refine your skills, learn hedging methods and diversification risks.

4. Forex takes all the time.

Trader decides by himself how much time he is going to spend on trading. Trades can be executed 50 times a day, 5 days a week, once a year – the frequency depends on your desire, mood, trading strategy, skills etc. You don’t have to sit in front of the screen, tracking the price moves in order to be a trader. Trading can be easily combined with the main job.

5. Forex requires a special education.

Analytical skills, knowledge of maths and world economy would be useful in trading, but no special education is needed. If desired a trader can complete training at a brokerage company, attend webinars, get familiarized with a relevant Forex literature, widely accessible in the Internet and book stores.

Forex market is the youngest and fast developing financial market. For millions of people all over the world trading has become a life style and a source of income. People like to draw on imagination, but one should divide fancy from fact.

Added by InstaForex Staff