Forex Investing Myths

Oct 13, 09 Forex Investing Myths
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The Forex market is among the most unpredictable and frequently changing markets.  Although, this kind of trade is high risk, there are still many of people venturing into Forex investing.  There are many experts who give advice about Forex trading, whether that advice involves Forex robots, automated trading, or changing trading strategy.  However, there are still many people who do not know about Forex trading or what it entails.  The question remains: how can we separate the facts from the myths?

Myth #1:  Clever and complicated Forex robots offer the best service.

Unfortunately, this is not true.  Like many things in life, the simplest systems are the ones that work best.  The good thing about simple systems is that they use simple algorithms that require fewer elements.

Aside from that, many shady vendors claim that brilliant people design their programs.  Some even claim that people in NASA or the NSA create their programs.  This may all be well and good.  Yet, it takes more than a complicated machine to navigate the complex human world of trading.

Myth #2:  Trading can be improved by scientific and predictive systems.

True, Forex trading and automated trading systems use mathematical calculations to understand and analyze trading signals and their trends.  The mathematical calculations some programs claim are effective do assist traders in making decisions.  However, it is not merely a game of ones and zeroes.

These formulas could help you analyze the market, but they could never be used to PREDICT the outcome of a trade.  If they could, there would be numerous people who have become rich playing the Forex market.

Myth #3:  Forex robots can eliminate loss.

There are Forex robots and automated systems that claim to have zero losses.  Again, if this were true, many users would already be walking millionaires.  Yet, that is not the case.  Approximately, 95% of traders lose money every day.  The remaining 5% are the successful ones.  They use hard work and solid research to augment the technology.

Myth #4:  You can leave your Forex robots to operate on their own.

Forex robots claim that you can just turn on your computer and let the system let it operate on its own.  While the Forex can finish deals for you, all trading systems have to be programmed and monitored in order to ensure that the programs performs up to your specifications.  Why would you trust such an important thing to a completely automated process?

Myth #5:  Success in demo accounts equals success on an actual trade.

Possibly, because you have displayed effectiveness with a demo account, you could have the same results with a real account.  Obviously, real scenarios are much riskier.  This is why it is important for you to research customer reviews and comments about Forex products you are interested in.  Most Forex robots websites and forums discussions about the common problems encountered with real accounts and how they were resolved.

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