In our last article, we had a look at just some of the common misconceptions people have about the forex market. This time around, we shall have a look at a few more.
No-one is controlling the market
New traders often feel hard done by when their trade goes the wrong way. Often, they believe someone is pulling the ropes behind closed doors. Really though, the forex market is far too large and unruly for any one person to control it. The most likely explanation is just that they made the wrong trade.
Quantity does not mean quality
Whenever people start trading in forex, they should make a plan to know where they are going. They should focus on an area and do well in it.
Some traders, though, believe that they should keep getting more and more trades. They also believe that they should invest in as many pairs as possible. While it is generally true that it is advisable to diversify investments, traders should always still be able to concentrate on what they are trading. They should not overwhelm themselves with all the trades they make.
Timing the market does not always work
Do not try to predict what the market will do. Many have tried and failed. Many advanced traders even have a hard time with this. The best thing to do is to follow the market and see where it leads. Any predictions you do make should have some basis in real price movements.
Complexity is not better
This ties in with what we said earlier about doing fewer trades. It is generally best not to overwhelm yourself too quickly. Find a good simple strategy, and adjust it by small amounts if need be. In this way, you will slowly develop a more sophisticated system over time. Stick with what works and do not try to be too clever.