Most common misconceptions among novice traders
There are many misconceptions among novice traders. Many people are investing in Forex without knowing the risk factors. They think investing money is all they need to do and they start to think about huge profit factors. When you are spread betting, you need to have an idea of the market. Many misconceptions are flying around in the traders’ mind and this article will tell you some of the most popular ones.
You will find that these misconceptions are very much true and you will hardly find any novice traders who are not suffering from such problems. The more you read this article, the better you will understand how people are trading believing the wrong way is correct. If you want to trade in Forex and become successful, you should read this article.
You can’t avoid the losing trades
The majority of traders are more concerned about their winning rate. They never embrace their losing trades. But losing trades are inevitable and there is nothing you can do to avoid this. You might have precise knowledge of trading industry yet you will have a few losing trades. Even the most experienced traders in the United Kingdom often have to face a series of losing trades. They always trade this market with low-risk exposure so that they don’t lose a huge sum of money. Being a new trader you should look for high-risk reward trade setups so that you can easily cover-up your trading loss.
Knowledge is power
You need to have a clear concept to become a professional trader. If anyone asks you, what is spread betting, you must be able to give them a clear answer. There are three major elements in currency trading. Learning the technical part is really easy but when it comes fundamental analysis, things become more complicated. But there is nothing to worry about. If you devote yourself it won’t take much time to master the art of fundamental analysis. Last but not the least comes sentiment analysis.
The majority of the novice traders don’t give any importance to the market sentiment. But without assessing the market sentiment you can’t trade this market with the extreme level of precision.
Only the big traders can win
Many people believe that it is only the big traders who are winning in spread betting. They have many reasons to think this. If you look at the success rate of Forex, you will find that all of these rates belong to the big traders. You might not have seen any retail trader who makes consistent profit. People believe it is the big traders they can make the profit because they have money. The small traders cannot make the profit because the market is not moving and the big people can control the market with their profit. With this type of thinking and ideas in mind, people come to invest in Forex.
There is no doubt that you will lose your money if you think only the big traders can make their investment worthy of Forex. No one can manipulate the price of the financial assets. If you can develop a balanced trading system, you can easily make a profit even with a small trading account.
This market has no pattern
When we first looked at the Forex market, we also believed that this market has no pattern. How could there be? The trends are moving up and down, the charts are changing and every time we are watching on the chart, the prices are going up and down. We cannot say that these price levels are following a matter. This makes the people believe that Forex is a random market. You do not need a strategy and you need to place the random trades on the market. The market will give you money because there are no patterns. Some people also believe that analyses, strategies, charts and indicators are all made up concepts in Forex. They are made up of the big traders and brokers to make the small traders lose their money in Forex. This market always follows periodic patterns which helps the pro traders to make money.