This archive report was first published on 25 October 2019.
Published on October 25, 2019, the Bank for International Settlements reported that forex trades average $6.6 trillion per day, up from $5.1 trillion three years ago.
Despite the massive scale of forex trading, many people are unaware of the facts surrounding this market. To ensure that you understand all the details, let's debunk a few myths about forex.
One common misconception is that trading forex is expensive. However, experienced traders know that you only need a minimum of Sh1,000 to begin trading, as pointed out by an article on Standard Digital. This is more than enough for beginners to test their skills without risking too much capital.
Another myth is that trading gets you rich quickly. While there have been some traders who start small and end up with large returns in a short period of time, this isn't the case for everyone. Like all trading methods, forex requires a lot of time, effort, and dedication to learn the market and get working strategies that can bring in some serious profits.
Some brokers claim that you pay 'zero commission', but this is misleading. While technically, you don't pay a 'commission fee', you will end up paying for the spread, which is the gap between the buy and sell price of a currency pair you want to trade, as explained by FXCM.
Finally, a leverage is the amount of money your broker will lend you in order for you to trade more and get more profit. While the purpose of leveraging is to increase your profit margin, it doesn't necessarily mean it will automatically raise it. As our correspondent Peterson Otieno explains, leverage is a double-edged sword that can execute investments for new traders.
