I read a lot of good information online to do with forex trading but most of the information I read is rubbish, yet many forex traders believe it. The myths I am going to cover here are mostly spread by so called market gurus and system sellers, so let's look at them.

First of all before we look at the myths, let's answer a question: Why do vendors and gurus spread them, if they know they won't make money? The answer is they make money out of them - by selling systems and courses that don't work for the user, but earn the vendor lots of money. These people simply appeal to the greed and naivety of novice forex traders. Let's look at a few forex trading myths that are guaranteed to lose you money.

1. Day Trading Works

If it does, why do you never see a day trading track record that has made money? Because of course it doesn't work, yet vendors continually sell them backed by a hypothetical track record - that's a track record based upon KNOWING the market prices! Well we can all make money doing that.

They sell their systems and dont trade them because they haven't got the confidence to trade their system because they know it won't make money, but they know some mug will believe it and buy the system. For the record - all short term volatility is random and prices can and do go anywhere in a day, so trading daily ranges is doomed to failure.

2. Markets move to a scientific law

Well if they did, there would be no market, as we would all know the price in advance! Duh? This is obvious to anyone, yet people still fall for the myth of scientific theories such as Elliot wave, or the Fibonacci number sequence. Elliot wave says markets move scientifically, yet gives no objective theory to make money! Well that gets rid of that theory, lets look at another favourite: The Fibonacci number sequence. This was actually based on the copulation of rabbits and had nothing to do with finance, but was hijacked by the investment community and the myth was born.

It actually predicts nothing in financial markets and the levels break, as often as they hold - If you dont believe this, try and see how quickly you lose your money. Apart from the fact these scientific theories can't work, you have to wonder if it was that easy to make money with them, why the vendor will sell it to you, for a few hundred dollars, when he could keep quite and earn millions.

3. Buy Low Sell High Will Make You Money

Try it and you will lose. No one can predict where a low point will bottom and when a high point will be reached. If you try and predict you are "hoping" that levels break or hold and the market will kill you. If you want to win don't try and predict, act on the confirmation of a level holding and that means looking at price momentum.

4. You can earn a regular income

No you can't. You have seen the ads earn $3,000 a month, 20 pips a day etc - this myth doesn't need any explaining it's obvious its not true and anyone who falls for it, deserves what they get - an empty account. If you want to win at forex trading make sure you don't fall for any of the above myths - everyone of them will ensure you lose your money.

The Good News is:

When you trade you take money off losing traders so if they believe the above forex myths it increases your chances of currency trading success!

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