This archive report was first published on 25 October 2019.
On October 25, 2019, the forex market was valued at $6.6 trillion per day, according to the Bank for International Settlements, up from $5.1 trillion three years ago.
Despite its massive size, many people are still unaware of the facts surrounding forex trading. In this article, we will debunk some common myths about forex trading to ensure that you understand all the details.
One of the most common misconceptions is that trading forex is expensive. However, an article on Standard Digital points out that you only need a minimum of Sh1,000 to begin trading, making it an affordable route for anyone interested in forex.
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. Forex trading 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, more leverage does not automatically equal more profit. While the purpose of leveraging is to increase your profit margin, it doesn’t necessarily mean it will automatically raise it. Our correspondent Peterson Otieno explains that leverage is a double-edged sword that can execute investments for new traders, which anyone looking to start forex should be wary of.
