Being one of the most actively traded market territory, Forex Trading has something in itself that attracts investors like no other asset class. People from various backgrounds try their hand at Forex through one or the other channel (Brokers, Bank Accounts, Phone based applications etc.). Despite enjoying one of the most advanced trading infrastructure and transparency, we often find ourselves stuck with where to start from. Let’s understand some basics of the trade that invariably apply to everyone who wishes to benefit from this market.
Let’s talk about Bob. Bob (who has a decent paying job) has some investible income. Bob wants to trade in Forex to create a secondary income source for himself that will help him in the long run. Bob searches the internet for “How to Trade in Forex”. There shows up a list of websites offering brokerage services, trading platforms, teaching the trade itself and so on. Since Bob uses a smartphone and would like to be updated with the events in the Forex market real time, he prefers downloading an app on his phone that would teach, advice, facilitate and monitor his trading activities. Bob downloads an app called Financika that promises all such convenience. Now Bob has a pocket friend who would help him with all the Forex updates and trade requisites.
But, does this all mean Bob would succeed at trading Forex? Naah!! Having the tool does not guarantee performance if one does not know how to use it. With Forex Trading, the way to do so would be to learn on the field itself. Being involved in the market, understanding what drives the market up and down, what are the technical, regulatory aspects of the trade are some of the check points indispensable for a successful trade.
Coming back to Bob, his internet research and his new friend the Financika app helped him with all above. What next, what all does Bob need to know now to confide his hard earned money into the actual trade? Experience! Now Bob needs to know what went well for others and what led to disaster. Bob asked his fellow traders and experts about the same and zeroed down to a list of myths that would prevent him from trading on his own judgment and make him a part of the herd. The list goes:
- Good Brokers (and Platforms) ensure success:
Having expert advice and efficient platforms like Financika does help in trading but does not mean success. One has to understand the market and Geopolitics oneself. One needs to know the major Macro-Economic events around the globe.
- An academic degree is a requisite to be profitable:
While an academic degree does help in understanding the trade faster, not having one does not mean one cannot trade and succeed. More than academics, it is the understanding of the market dynamics that fuels trading growth, as writes one of the seasoned traders in Financika testimonials.
- I will learn today and trade tomorrow:
Learning to trade is an ongoing process and cannot be achieved just by reading some books or blog. One has to get involved in the market and get his/her hands dirty to learn trade. Trade simulation software (virtual money) are a good approach to practice the trade before putting in a part of savings
- Simply following a trade expert will work:
What worked for one may or may not work for the other. There are differences in understanding, expectations and motives to trade. Moreover, a majority of experts available endorse and promote specific assets
- Forex trading is gambling:
You just need a good appetite for numbers. Forex Trading is capitalizing your knowledge of Macro-economy and market sentiments.
Knowing the trade mechanism and having some experiential elements in his repertoire, now Bob is confident in himself about Forex Trading and ready to invest.