When people hear about financial success stories, the first thing they often think about is how lucky the person is for their success. Most of the time, they forget and blur out the hard work and sacrifices the person gave for their financial success story. The same goes for people successful with stocks, forex trading, and property ownership.
In the last few years, many online financial investments have boomed. One of the many is forex trading. Even though many think it only became popular during the pandemic, forex trading has been around since the 1970s. Today, trading in the forex market has been the most convenient it has ever been.
As long as you have your smartphone or laptop, you can access the forex market with the trading platform of your choice. The thing is, because of its convenience and accessibility, many have formulated unrealistic expectations about forex. Sadly, many of those expectations are far from the truth, which leads people to disappointment.
If you’ve been hearing about forex and are curious about it, here are seven unrealistic expectations people have and the truths about them.
1 - You can trade well just by “acing” it; without learning the market.
When people close to us, such as our family or friends, tell a success story, we assume that if they did it, it must be a piece of cake. We think that because people close to us made it, it’s easy to ace the same thing without working hard. Why we often think that way is for Psychology to answer, but long story short, this mindset triggers unrealistic expectations.
If you expect to make it big in forex just by “acing” the currencies you buy and sell, it won’t be a surprise if you lose massive amounts of funds. Forex trading requires learning, analysing, and understanding to ace your investment.
2 - Making hundreds to thousands of dollars by starting with a $10 account.
Most success stories we hear often blur out the uncomfortable parts that lessen its magic success. Sometimes, people also exaggerate that they started with a small amount and grew it without adding anything. The truth is forex trading is like managing a business. You’ll need a sufficient amount of capital to reach your desired profits.
But even though that’s the case, that doesn’t mean you can’t start small. In fact, it’s nice to start small, so you can familiarise yourself with how the market works. As you learn more about your trading platform, you’ll learn how to consider the benefits of leverage in trading.
3 - The forex market is like a “game of chance.”
This third expectation is also one of the common misconceptions people have about forex. Many people think that forex trading is gambling. One of the reasons people expect the market to be a game of chance is that many traders start with the first expectation I shared.
If you enter the market with a mindset that you can “swing” and “ace” your way through it, you disregard the hard work of professional traders. Again, forex trading requires understanding the strategies and nature of various trading types. Expecting that it’s like a game of chance will only put you in an unpleasant situation.
4 - Expecting other people’s strategies to work well with your trading account.
It’s wise to look and learn from people with a profitable journey in forex. After all, it’s easier to navigate and familiarise the market when you absorb other people’s trading strategies. But it’s one thing to learn from other people and another to expect that their approach will work with you.
Keep in mind that the forex market is volatile. Other people’s strategies might not work with you because the market’s condition is different from when they were trading. Instead of copying how other people made it, study their strategies and analyse how you can apply them to the market’s changes.
5 - Expecting to trade with the best rates without monitoring the currency rates.
Some people have the mindset they can trade, sell, or buy currency pairs whenever they want. Realistically, you can. But if you’re after making a profit, trading in forex will require you to allot time monitoring the rates. In other words, trading can be a little demanding.
Many professional traders devote hours of their day to monitoring currency rates so they can sell, buy, or trade their currencies wisely. If you have another job or don’t have the time to watch the screens, choose a platform that will alert you about the market’s status. You can’t expect to earn without religiously monitoring currency rates.
6 - You can be an instant millionaire overnight.
Since many assume that forex trading is similar to gambling, many have the unrealistic expectation that they can be an instant millionaire overnight. Like stocks, many professional traders see forex trading as a long-term investment. If you’re entering the market hoping to become an instant millionaire overnight, the market might disappoint you.
It takes time, patience, and commitment to succeed in forex trading. Traders spend so much time planning, strategising, and analysing the market. Unfortunately, no matter how good you are at trading, it’s impossible to become a millionaire overnight.
7 - Expecting to make 50% profit monthly.
If you start a trading account with a $1000 capital and only spend $500, you’re expecting to make 50% profit monthly. The truth is, you’re more likely to spend more than earn in your first few months of trading. Again, trading is like operating a start-up business.
You can’t expect to earn without having to spend for what you want to have. Start by being realistic with your profit goals to avoid having unrealistic expectations, especially if you’re new to the market.
Having unrealistic expectations will only ruin your forex trading journey.
In almost any financial investment, people have many unrealistic expectations. When you know nothing about an investment form, it’s easy to believe what others say and have the same expectations. That’s why before you dive into forex, take the time to learn and understand how it works. That way, you’ll maximise and feel that your trading journey is worthwhile.
About the author:
Bianca Banda is a writer for FP Markets, one of the best-regulated Global forex brokers with over 40 global industry awards—and counting, making them the trusted trading broker by many.
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