Updated from its original posting on 2012-08-24
“Ninety-nine percent of failures come from people who have the habit of making excuses.”
– American Inventor George Carver
1. I have no time to trade.
A common misconception when it comes to forex trading is that it requires you to spend every waking moment in front of the computer. While some traders prefer doing this, it’s not the only way to trade.
Swing and position trading are two strategies that you can use. If you have a full-time 8-to-5 job, for instance, you can analyze the markets and trade forex after dinner. For example, you’d get home at 6 pm, take an hour or two for dinner, then analyze the markets on longer-term time frames (4-hour, daily, weekly, monthly) charts from 8 pm to 10 pm, set limit orders, and then head to sleep.
It won’t be easy, but it is doable.
2. I don’t have enough money.
I must admit that this is an understandable excuse. Understandable, but an excuse nonetheless. The great thing about retail forex trading is that it’s so easy to create demo accounts. It won’t even take an hour or cost you a single cent.
Now, if you’re not into demo dollars, you can put up a live account for as little as $25 with no minimum position size. You can trade 1 unit if you wanted to. Just make sure that you only trade what you can afford to lose. Starting with a small investment won’t make you a millionaire any time soon, but it can get you started in forex trading and feeling the psychological effects of trading real money.
3. There’s too much risk involved.
Forex trading, as with any endeavor, is truly risky without education and practice. And what many people fail or refuse to understand is that it is not riskier than just about any other investment.
Like with any investment or business venture, there will always be risks involved. The key to profitability is in managing your risks by preparing for as many scenarios as you can and by controlling your emotions. If you’re a total newbie to forex trading, you can start by mastering the concept of risk management (i.e., properly setting stop losses and position sizing).
4. Forex trading is a scam!
Forex trading itself is NOT a scam, but loose industry regulations do present opportunities for a lot of scammers.
Check out the websites of regulatory agencies like the CFTC or the NFA or even hit up your fellow forex traders on the forums before you open an account with a broker. Of course, it goes without saying that you should avoid buying systems, strategies, and products that guarantee pips and profits. (Clue: nothing is guaranteed in the market except uncertainty!)
As with any industry, scams in the forex trading industry are usually no different from falsehoods in the other investment scenes. You just have to educate yourself and make smart decisions when it comes to investing your money.
5. Forex trading is too complicated.
The Internet has made it so much easier to acquire knowledge than ever before. If you have the time to stalk your crush on Facebook and find out where he or she likes to go out for lunch, then you definitely have the time to catch up on all that there is to know about forex trading for that day.
To make it even sweeter, you don’t need to pay a cent to get the education or access to forex news and tools! There’s so much free, quality stuff out there!
For instance, you can learn everything you need to know by just going through our School of Pipsology. I understand that forex trading is still a relatively new concept that’s daunting to most people. But if you’re really interested in it, there’s no excuse to not give it a try. With study and practice, it offers such an overwhelming potential for success!