Despite being a popular and well-studied investment market, forex remains to be a scary thought for potential investors. Granted, it’s not for everyone. But there’s also a good chance the fear comes from the wrong ideas about it.
Here are some of them:
Only Rich Investors Can Do Forex
Perhaps this idea stems from the fact that a huge amount of money circulates in the market. After all, it’s a trillion-dollar business. But many platforms today provide flexible and even cheap investment options.
Moreover, how much you use as a capital is not what matters. It’s what you do with the money. If you get smart and learn as much as you can, you can be a big-time trader in no time.
You Cannot Invest in Forex 24/7
To be clear, each of the forex markets has its own opening and closing time. The duration will be the only period you can buy and sell forex. But because there are so many exchanges around the world, it seems like the market itself is open for 24 hours day, 7 days a week.
To illustrate, the London market starts at 8am GMT and ends at 5pm GMT. By 1pm GMT, the US market opens and it closes at 10pm GMT, at which time the Asian market begins.
Forex Trading Loses Money Fast
Like any other market, forex trading means you win some and lose some. But many factors affect how much you earn in a day. These include the history of the currency, time of day, the forex trading platform you use, the currency itself, and even the country where the currency comes from. For example, of all the forex exchanges, the one in the United States is the most active. This is because many currencies are pegged toward the dollar.
You cannot remove the risks from forex exchanging, but you can learn to mitigate them. Choose a good forex trading platform that gives you access to different markets and supports you with expert research and real-time news and data.