Many traders belong to different kinds of forex communities. Some congregate on certain blogs while others hang out in a live trading room with other traders. A forex forum however, is the most popular amongst traders as it provides them with room to voice opinions and also learn from other traders.
Unfortunately, many traders have ended up being deceived into believing wrong misconceptions that have been regurgitated over and over by many traders and so it is passed off as fact.
Here are some examples:
Trading systems are the most important part of trading
This is one of the biggest misconceptions in most forex forums out there. It equally explains why the forex system section of most forex forums is the most active. Traders are stuck in the perpetual circle of trying to find that elusive holy grail.
As soon as someone talks about a new system, majority of the traders migrate to the thread to see what the system can do. If it looks good some will dump their old strategy and migrate to the new one without blinking!
Give it a few weeks and the thread will die a natural death and the circle continues. If you must be part of a forex forum, do not allow yourself to fall into the forex system merry-go-round. A sound trading system without discipline and money management is useless.
So if your trading system has looked good in back tests and you are struggling with it, then the problem is from you.
You must trade every news release
This is another misconception. Traders feel that if you are not trading the hundreds of releases and not glued to CNN or Reuters you will not make money. This is why a thread is normally dedicated to analysing a particular bit of news until its release.
Trading in this manner is wrong. In the first place, not all news moves the market. The ones that move the market do not move it in the same exact manner so news trading as a small time retail trader is 60% guess work. So if you decide you do not want to get involved in news trading, don’t allow the pressures of forex forums to get to you.
It is impossible to make money while trading the daily charts
This is another false one. People feel it is easier to make money off the lower time frames than it is to make money of the higher time frames but this is not true. If you notice that your trading system would give you more profits on the daily charts then switch to it!
The reason why most people stay away from the daily charts is he increased “risk” but if you understand money management, you will be able to see that it is indeed less risky to trade the daily charts than to trade the 15 minute or 5 minutes charts!
Take for instance, a trader who risks 50$ per trade on the 15 minutes charts will lose at least $150 on a ranging day but a trader on the daily charts will only lose $50 if his trading signal was wrong at the end of the day!
So while forex forums can be helpful most of the time, do not believe everything you read!