E-Financial
Myths of Online Forex Trading
By Abiola Akinyele, General Manager of FXTM Nigeria
Over my decade-long experience of trading the forex market, I have met many individuals with different ideas of what the market is. This includes both people with firsthand knowledge, as well as those with only a limited understanding of how the market works. It is not only beginners who believe in the myths of the market- surprisingly, some experienced traders do too. In this article, I will share and unravel some of these myths.
The myths are all those rumours that you usually read in online forums. Although it is a golden rule not to believe everything you hear, these types of myths can often take root in a trader’s mindset and can generate fear or distrust of the forex market. Some are misconceptions stemming from mistakes made by beginners who have most probably misused the trading platforms and who therefore spread exaggerated stories based on specific cases. For obvious reasons, they are not representative of how the forex market works. So, let’s explore these myths.
Myth #1: Trading is extremely easy
This is the quintessential myth par excellence and one which many new traders tend to believe. The process of downloading and opening the software to start operating is relatively easy since you can start practicing on a demo account using virtual money.All you need is a computer, internet access and a desire to start. However, earning a lot of money quickly is another story. Although there are some lucky traders who succeed as soon as they start trading, this kind of beginner’s luck does not apply to everyone.
Successful forex trading requires practice and a lot of invested time.You cannot expect to be profitable as soon as you start trading, even if you have been practicing for some time. It is one of the reasons why I would strongly recommend that anyone who intends to start trading or has a desire to learn about the forex market should attend forex training seminars, such as the onesheld in our various offices in Nigeria.Another useful source of information is the FXTM website, where you can join any of our webinars and checkout our online educational materials.
Myth #2: Forex trading is gambling
Although it is quite easy to compare gambling and trading because of the risk factor, they are not the same. Forex traders have access to a lot of macroeconomic information to help them make informed trading decisions. This is why education, understanding the markets and having a suitable trading strategy are so key. While there is always risk involved in trading, these factors make it significantly different from gambling.
Myth #3: You need an economics or finance degree to trade
This myth is one of the most wide spread and it is, of course, false. It is not necessary to be a university graduate or have many degrees to be a trader. The only technical barriers to entering the markets are the need for a computer, internet connectivity and a strong desire to succeed – however, the willingness to learn is vital for anyone interested in forex trading. It’s essential to explore well-grounded education courses before beginning to trade, and I strongly recommend visiting the education section of the FXTM website.
Myth #4: The more complex the strategy is, the more profit it produces
Normally traders start with a simple strategy and only see little performance. Therefore, they assume that if they continue to make an adjustment to their system, taking into account some other variables, they will increase their profitability. But what they do not understand is that this is not how trading works. A winning strategy adapts to both your type of trade and your trading personality.In short, it is not something that depends on how complicated the strategy you use is. In fact, if you use a very difficult strategy that you do not know how to manage, it is likely that you will simply lose money.
Myth #5: Forex is a scam
It is true that there have been cases where individuals have had very negative experiences in the forex market, either due to the broker they have chosen to work with, due to lack of education on the forex market, or due to the wrong trading strategy. But this doesn’t mean that forex as a whole is a scam. Forex is a real currency market where anyone can trade for themselves and also be responsible for their own trading decisions and their losses. Individuals also need to be careful of people who are looking to defraud traders, whether that be by including them in pyramid-scheme businesses that seek to take away profits, or due to them being unreliable and disreputable brokers. However, it is necessary to emphasize that the market itself is NOT, by nature, fraudulent.
Myth #6: Following what other traders do leads to success
DO NOT ever follow what other traders do just because they look like they know what they are doing. A trader must develop their own skills and learn from their mistakes.They can listen to other traders, of course, and even follow the strategy of a trader they trust through copy trading, but keep in mind that every individual’s experience of forex trading is different. You should take your own trading style and goals into account and always carry out your own research before committing your capital. Experienced professionals can greatly help new traders; however, this should be part of an informed and educated decision.Do not simply believe in everything people say, no matter how experienced they may look.
Myth #7:You need to watch your computer all the time
It is humanly impossible for a person to focus on one thing all the time, especially to constantly watch their computer screen. Most professional traders monitor the market movements before closing their positions. Traders could also leave standing orders with forex brokers which automatically close the order for them.
So, no;in order to be a forex trader, you do not have to be stuck onyourPC24/7, but you should be able to devote a considerable amount of time to watching the markets.
Myth #8: Money management means placing a stop
The handling of money is one of the most important factors with regards to the success of a trader. In fact, I consider a proper understanding of money and risk management the most important skill for a successful trader to have. However, money management does not mean just placing a stop order on a trade, it also involves the amount of the total account that will be risked by each trader. When focusing on what money management is, the trader must take his operations to the next level.For that reason, it is something that should not be ignored because if it is done, even using the best strategy, it will fail.
Myth #9: The more pairs you exchange, the better
Trading many pairs at the same time may distract you and that could lead to many losses. Trading more pairs does not always mean that you will have more profits;it actually means more work and less time to think rationally.
Therefore, the best option is to be patient and wait for the pairs you are trading to bear fruit— especially if you are a new and inexperienced trader.
Professional traders already have the currency pairs that they are familiar with and they know how to manage their strategy and their time.
Summary
It is important for a forex trader to do their own research to understand what it really means to work with the fast-moving markets. Much of this learning will come from experience since not everything can be taught through courses, articles and guides.
Myths in the foreign exchange market are very dangerous and harmful for traders. Therefore, you should always fact check everything you read or hear and keep an open mind and try things for yourself.
United Bank for Africa (UBA) has successfully completed its much-anticipated system upgrade, restoring all banking services to normalcy.
In a message to customers, UBA reassured customers that they could now log in to the mobile app and enjoy a smoother, more efficient banking experience.
The bank acknowledged any inconvenience caused by the process and reaffirmed its commitment to providing top-tier financial services.
“We are pleased to inform you that our mobile app upgrade has been completed, and all services have been fully restored. You can now log in and enjoy a smoother banking experience and improved services,” UBA announced.
While the upgrade promises enhanced functionality and reliability, UBA urged customers experiencing any lingering issues to reach out to its 24-hour Customer Fulfilment Centre via 02012808822 or email [email protected] for prompt assistance.
With the completion of the process, UBA reassured its customers of its dedication to innovation and excellence in banking.
Socio-Economic Rights and Accountability Project (SERAP) has called on the Central Bank of Nigeria (CBN) to immediately revoke its recent increase in Automated Teller Machine (ATM) transaction fees, describing the move as “Patently unlawful, unfair, unreasonable, and unjust.”
In an open letter addressed to Olayemi Cardoso, governor, CBN, and dated February 15, 2025, SERAP warned that the fee hike would worsen economic hardship for millions of Nigerians, particularly those at the lower end of the financial spectrum.
The rights group gave the apex bank a 48-hour deadline to reverse the policy or face legal action.
The CBN’s new directive mandated that ATM withdrawals at off-site locations, such as shopping malls, airports, and standalone cash points, will attract an N100 charge per N20,000 withdrawal.
Additionally, a surcharge of up to N500 may apply for transactions conducted at certain locations. The new fees are set to take effect from March 1, 2025.
In its letter, signed by Kolawole Oluwadare, deputy director, SRERAP criticized the policy, arguing that it would disproportionately affect struggling Nigerians while benefiting commercial banks.
“The manifestly unfair increase in ATM transaction fees will hit hardest those at the bottom of the economy and exacerbate the growing poverty in the country,” SERAP stated.
The organization further argued that financial institutions should bear the cost of banking operations, rather than shifting the burden onto customers, particularly those with limited financial means.
SERAP accused the CBN of prioritizing the interests of banks over the welfare of ordinary Nigerians, many of whom already struggle with the high cost of living.
The group pointed out that banks continue to report record-breaking profits while imposing excessive charges on customers.
“CBN policies should not be skewed against poor Nigerians and heavily in favour of banks that continue to declare trillions of naira in profits, mostly at the expense of their customers.
“The increase in ATM transaction fees will inflict misery on Nigerians and contribute to human rights abuses,” the letter read.
SERAP also noted that the policy contradicts President Bola Tinubu’s commitment to tackling poverty in Nigeria.
The rights group argued that the CBN’s action violates multiple legal provisions, including the Nigerian Constitution, the CBN Act, and the Federal Competition and Consumer Protection Act.
SERAP highlighted specific sections of these laws that prohibit unfair business practices and protect consumers from exploitative charges.
According to SERAP, the increase in ATM fees discriminates against low-income Nigerians who may struggle to afford the higher fees, creates a two-tiered financial system that favours the wealthy, contradicts the CBN’s stated mission to promote national economic well-being, and violates international human rights obligations under the United Nations Guiding Principles on Business and Human Rights,
“The CBN has responsibilities under the UNGPs to take effective steps to avoid or mitigate potential human rights harm and to consider ending any charges or transaction fees where severe negative human rights consequences cannot be avoided or mitigated,” SERAP asserted.
“We would be grateful if the recommended measures are taken within 48 hours of the receipt and/or publication of this letter.
“If we have not heard from you by then, SERAP shall take all appropriate legal actions to compel you and the CBN to comply with our request in the public interest,” the letter warned.
Federal government has engaged the World Bank for a fresh $300m loan to strengthen Nigeria’s health security infrastructure.
Information obtained from the World Bank showed that the loan, which is under consideration, will be implemented by the Nigeria Centre for Disease Control (NCDC) with the Federal Ministry of Finance acting as borrower on behalf of the Federal Government.
According to information on the World Bank website, the loan project is expected to “increase regional collaboration and health system capacities to prevent, detect, and respond to health emergencies in the Federal Republic of Nigeria.”
The project is currently in the pipeline stage, with the disclosure date scheduled for February 6, 2025.
The World Bank board is expected to give its approval on July 30, 2025, following necessary assessments. The appraisal is set for April 14, 2025, and implementation will commence in the 2026 fiscal year.
According to a document on the concept of environmental and social review, the Nigeria Health Security Programme aligns with broader government efforts to enhance disease surveillance, diagnostic capabilities, emergency response, and laboratory networks across the 36 states and the Federal Capital Territory.
The programme’s primary objective is to enhance regional collaboration and strengthen Nigeria’s health systems to deal with emergencies. It falls within the World Bank’s investment in health, nutrition, and population sectors across Western and Central Africa.
According to the Environmental and Social Review Summary of the project, HeSP will expand molecular laboratory capacity, upgrade primary healthcare centres, establish emergency operation centres, and construct warehouses.
It will also deploy mobile laboratories and install water, sanitation, and hygiene facilities alongside solar energy systems to support health infrastructure improvements.
Although the total project cost is yet to be determined, the World Bank has committed $300m to the initiative. The funds aim to bolster Nigeria’s pandemic preparedness and improve response mechanisms for public health threats.
The initiative comes as Nigeria strengthens its public health infrastructure following lessons from previous outbreaks, including COVID-19.
If approved, the loan will support the NCDC in improving disease surveillance, diagnostics, emergency response, and laboratory services.
Nigeria has previously secured funding from international financial institutions to boost healthcare resilience, including financing for vaccine procurement, emergency medical services, and infrastructure development.
However, the project, categorised as a high-priority public health intervention, carries substantial environmental and social risks due to potential health, safety, and ecological concerns associated with infrastructure expansion.
Identified risks include increased medical waste, occupational hazards, and heightened energy and water demands.
Social risks range from potential grievances from stakeholders to concerns over land acquisition and implementing health interventions in conflict-prone areas.
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