10 COMMON MISCONCEPTIONS ABOUT FOREX TRADING THAT INVESTORS NEED TO ELIMINATE IMMEDIATELY

What Is Forex Really - Going Beyond Basic Understandings

When it comes to what is forex trading, most people only know the surface aspect - buying and selling currency pairs. But forex trading is a much more complex system. This market originated from the need for internationalization, initially reserved for governments, large banks, and investment funds. Today, individual investors have the opportunity to participate through forex broker (broker) platforms.

What is forex trading from a practical perspective? It involves using a (trading platform) provided by a broker to execute Buy-Sell (Buy-Sell) orders on currency pairs like EUR/USD. What makes this market different is its extremely high liquidity, 24/7 operation with T+0 (immediate execution), whereas stocks only operate T+2.

The Bitter Truth About Success Rates

Images of successful forex traders - making huge money, traveling freely, living like billionaires - have attracted many generations of investors. However, the real numbers are much darker: 90-95% of new traders experience losses in the early stages. This is not a personal failure but a market law.

The root cause lies in false expectations. Many enter forex with the hope of “getting rich quickly,” believing that just pressing Buy-Sell a few times will multiply their account. They fail to realize that psychology, discipline, and market knowledge are the key factors.

Classic Misconceptions to Avoid

One: Forex Does Not Require Large Initial Capital

The common belief is that trading forex requires huge amounts of money. The reality is quite the opposite. A pip (the smallest price movement) of the EUR/USD pair equals 0.0001, but thanks to leverage (leverage), you only need about 100 EUR to buy 100,000 EUR. This opens the door for small and medium investors.

However, leverage is a double-edged sword - it amplifies both profits and losses. That’s why risk management is more important than the amount of capital.

Two: Fraudulent Brokers ≠ Fraudulent Forex Market

When hearing about cases of losing money with no withdrawal, many conclude “forex is a scam.” But the real culprit is untrustworthy, unlicensed, or illegal brokers. The forex market itself is legal - the issue lies in choosing the right trading platform.

Before participating, investors must thoroughly research their broker: legal licenses, reputation, how client funds are managed (usually kept in segregated trust accounts).

Three: Forex Market Is Not Just for Short-Term Speculators

Most discussions about forex trading focus on short-term trades with high leverage. But historical exchange rate trends show clear long-term trends, and a “Buy and Hold” strategy is entirely feasible. Currencies are also used by governments and banks for hedging risks and diversifying assets.

Four: Accurate Forecasting ≠ Guaranteed Wins or Losses

Predicting the market direction correctly is necessary but not sufficient. Many traders make the mistake of “relying on forecasts to open positions” - they are confident in their predictions and do not wait for confirmation from price charts. If their forecast is wrong, psychological frustration can lead to a series of losing trades.

The golden rule: forecast in advance, but wait for price chart confirmation before opening a position.

Five: Up and Down Markets Both Offer Opportunities

The EUR/USD chart or any other pair has “waves” - continuous oscillations. You can profit from Long (mua) positions when the price rises or Short @E0=bán( positions when the price falls. The issue is, when you place a wrong Long, and the price drops sharply, how long do you wait to get back in? This is why Stop-loss orders )stop-loss( are essential - they limit losses instead of losing everything.

) Six: Trading Strategies Do Not Need Constant Changes

A major mistake of new traders is constantly changing strategies. They believe market volatility requires “flexibility.” In reality, history repeats itself - strategies that worked before still hold value if you understand their essence.

Instead of changing strategies, build a “strategy portfolio” ###portfolio of strategies( for both short and long-term, ensuring you truly understand each before applying.

) Seven: Small Percent Gains Accumulate to Profit

Successful forex traders do not make money from “big wins” but from disciplined trading: analyzing the market, opening small positions, and accumulating profits gradually. This does not mean frequent trading - quite the opposite.

Overtrading ###moving too many positions( is a big trap. Each additional trade costs fees, margin, and focus. Instead of “scalping every small movement,” select high-quality trades.

) Eight: Forex Trading Does Not Require a Financial Degree

Initially, forex was a playground for professionals. But nowadays, many individual traders without a financial background are successful. The key is persistent learning about the forex market, accumulating experience through each trade, and not giving up after losses.

Nine: Learn from Experts but Take Responsibility for Yourself

Interacting with veteran traders is helpful, but never neglect personal responsibility. Experts are not gods - their forecasts can be wrong. Take in information, verify independently, and understand that the final decision is yours.

Ten: Forex Vs Stocks - Profitability Vs Risks

Compared to stocks, forex trading has higher profit potential. While stocks offer 10-20% annual returns, forex can achieve similar figures in weeks or even days. Of course, the risks are proportionally higher.

But modern risk management and good controls can reduce losses. If you are willing to accept risks, have a strong mindset, and know how to control emotions, forex is a suitable playground.

Choosing a Broker - A Decision for Survival

To participate in forex trading, you need a reliable intermediary. Choosing a broker is choosing a partner for your entire trading journey. A reputable broker with low fees and regulated by oversight authorities will minimize the risk of scams and maximize profits.

Professional brokers usually provide user-friendly trading platforms, support various asset classes ###forex, indices, commodities, stocks, cryptocurrencies(, and are licensed by international regulatory bodies. Your deposit is typically managed in a segregated trust account according to international law.

Conclusion - Smart Action

The truth about forex is even deeper than the 10 points above, but these are the most important fundamentals. To succeed, you must understand the market’s nature, avoid common misconceptions, and build your personal strategy based on discipline and patience.

Information about forex trading is abundant online, but not all of it is accurate. Spend time learning on your own, verify information from reputable sources, and gradually develop your trading skills. Then, you will no longer worry about misinformation.