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Five Things You Should
Know
About Trading the FOREX Markets.
As more and more people learn about trading
Forex, I keep running across the same objections, over and
over. There is a lot of misinformation floating around
about the Forex Markets and Trading Forex, so I thought I
would try and clear the biggest misconceptions up with this
article.
Misconception #1--Forex Trading is only for the
wealthy, or those who have the good credit to open a trading
account.The Truth: Virtually anyone who has a credit card or a bank account
can open a Forex Trading Account with just about any Forex
Broker. Brokers don't care about your credit rating, or
whether you're an expert Trader. There is almost NO risk of
applying to open an account and being turned down. As long
as you're at least 18 years old and have a mechanism in
place to fund your account with at least $250 US, you can
trade foreign currencies.
Misconception #2--You can lose everything you own
if you get caught in a bad Forex Trade.
The Truth: You do not risk bankruptcy if you open an account and get
into a trade that causes you to lose money. Forex Brokers
structure every trade so that if you lose all the funds in
your account, your trades are automatically closed so that
you cannot lose any more money than what is in your trading
account.
Misconception #3--You need an advanced degree in
Economics or Finance in order to make money as a Forex
Trader.
The Truth: The Forex Markets are NOT impossible to follow and
understand, and the knowledge one needs to successfully
trade in these markets is neither difficult nor expensive to
obtain. With a little searching, you can find several sites
online that are either straight educational sites that will
give you a solid background in trading Forex, or forums
where traders meet to share information and ideas. There are
a few (and only a few) places that sell educational material
that will move you along towards your goal as a successful
trader. There are MANY places that sell nothing more than
what you will learn on the free educational sites. Before
you spend a dollar on educating yourself, make sure the
vendor you are considering has established a reputation for
selling quality information.
Misconception #4--I just don't have the time to
trade foreign currencies.
The Truth: Unlike the stock market, which is open just a few hours a
day, Monday through Friday, the Forex Markets are open from
5:00 p.m. Eastern Sunday to 4:00 p.m. Eastern on Friday.
This gives traders around the globe the chance to trade
during "normal" hours, before, during or after work.
Many trading systems exist that call for you to remain in
the market for fewer than 15 minutes, so just about everyone
on Earth ahs "the time" to trade the Forex Markets.
Misconception #5--I'm afraid I'll get stuck in a
position and not be able to unload my contract, like what
happens to those guys who trade Pork Bellies.
The Truth: Also unlike the stock market, at any given point in time
there is demand from traders to both buy and sell particular
currency pairs. That means at any time while the market is
open, you can buy or sell a currency pair at the market
price. An hour later, you can reverse your decision and find
someone willing to buy or sell your contract, again at the
market price. Contrast that with certain low cap stocks,
where you could buy today, and for a variety of reasons not
find a one person to buy your stocks from you tomorrow, the
next day, or even next week. This won't happen in Forex.
Oh, and that story about the Pork Belly traders who got
stuck with a truckload of bacon dumped in front of their
house is just an Urban Legend. Honest. You can
look it up.
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J.J. Glenellis is a full time trader and a part-time
author and teacher of Forex methodology. His book 'A Simple
4X Trading Plan and Money Management System" has garnered
rave reviews from readers who found that the secret to
trading the Forex Markets profitably wasn't as hard as they
suspected. You can learn more about Mr. Glenellis'
book by visiting
http://www.simple4xsystem.net.
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