Forex Market Myths I – Speculators Are the Bad Guys
The other day I was reading Dan Brown’s book Angels & Demons; and realized something. We need bad guys for survival. We need someone to point our fingers at when things go wrong. In the trading arena this bad guys are called speculators.
When the market crashes you never hear a politician say: “well… we did some mistakes and the economy is responding” Have you ever heard the CEO of a big company say something like: “We took some wrong decisions and we are facing bankruptcy”.
It’s human character to blame others. The speculators are the scapegoat of preference when we talk about financial matters. What do you think, or feel, when you hear the information speculator? If the media succeeded you may think of them as the bad guys. I want you to analyze some ideas first; before you rush into harsh conclusions.
1. – We all are speculators; everything in life is speculation.
When you buy a money pair you are speculating; you think its price is going to rise. When you close your locaiongs it’s because you think the trend is changing. When you choose one career over another you are speculating, when you pick one car over another you believe it is the best thing you can have for your money, when you chose to read this you were speculating, when you got married (or dated someone) you were, certainly, speculating.
2. – Trading is a Zero-Sum game.
This might be a hard fact to accept. Any time you win a dollar, in any market, there is someone that lost it on the other side. When a market collapses and prices sink there are big winners on the other side that pocketed all those dollars; lost by the big crowd. Speculators, as everyone else, trade for the profit. Do you invest to lose?
3. – Speculators don’t manipulate the market.
Do you think speculators can manipulate the interest rates, the economical policies, when a country goes to war, the weather, etc. Speculators have not some kind of special strength; they just watch and trade hoping their decisions will rule to profit.
If you want to become a forex trader you need to grasp the idea you are going to make your living out of speculation. You need to avoid the traps of the group thinking. True achievers rule they never follow.
In the Forex Market 95% of traders are losers and they always point the finger to the winners; do you want to follow them? Anyone with the determination and the right information can learn how to trade the forex market. Having the right information from the beginning is very important. It will help you improvement very fast and avoid a lot of pain in your learning course of action. Look for a system that operates in a mechanical way, that leaves nothing to interpretation and learn it!!