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Myths of Online Forex Trading

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Abiola Akinyele - FXTM General Manager Nigeria
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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.


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Ugo Onwuaso is an ICT enthusiast. He believes technology should be used for general good. He holds a Master of Public Administration (MPA) degree from the Lagos state University. Dear Reader, Your support matters. But we believe that technology makes life more exciting and helps improve the lives of people around Nigeria and indeed the world. That is why, we have devoted our energy to independent reportage of technology and finance and how they affect lives. Our incisive and analytical view of how technology news affects the daily life help individuals and organizations make up their minds. Quality journalism costs money. Today, we're asking that you support us to do more. Kindly support our effort to deliver technology and finance journalism to everyone in the world. Donate as little as N1,000. Bank transfers can be made to: UBA Plc 1017156876 Communication Week Media Ltd

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E-Financial

FG Asks Banks to Report Individuals with N25m Monthly Transactions to FIRS

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Federal government has mandated banks and financial institutions to begin reporting monthly transactions exceeding N25 million for individuals and N100 million for firms to the tax authorities.

FG Asks Banks to Report Individuals with N25m Monthly Transactions to FIRS

Under the new provisions of the Nigerian Tax Act, financial institutions are required to submit quarterly returns to the Federal Inland Revenue Service (FIRS).

The agency will be renamed to the Nigeria Revenue Service (NRS) from January 2026, when the new tax system will take effect.

“Every person who has an obligation to deduct and remit tax under this Act or any other Returns for tax legislation shall render monthly returns to the appropriate tax authority, as specified deduction of tax in the regulation issued for that purpose,” the Act reads.

“Without prejudice to section 142 of this Act, every bank, insurance company, stock-broking firm, or any other financial institution, shall prepare, with or without demand be delivered by the relevant tax authority, quarterly returns to the relevant tax authority specifying the names and addresses of new customers;Nigerian fashion trends

“…and existing customers in the case of (i) an individual, all transactions where the cumulative transactions in a month amount to N25,000,000 or more, or (ii) a body corporate, all transactions where the cumulative transactions in a month amount to N100,000,000 or more.”

Prior to the new tax law, banks were mandated to report deposits of N5 million — a measure intended to curb illicit financial flows, according to  TheCable

Experts said the shift is part of efforts to tighten anti-money laundering reporting in the financial sector.

In 2023, Nigeria was listed on the grey list by the  Financial Action Task Force (FATF) over deficiencies in tackling money laundering and terrorism financing.

Since then, the country has been making efforts to exit the grey list, which subjects it to increased monitoring by the FATF.

In November 2024, Hafsat Bakari,  chief executive officer (CEO) of the Nigerian Financial Intelligence Unit (NFIU), said Nigeria has achieved upgrades in five key recommendations from the FATF.


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NIBSS: Active Bank Accounts in Nigeria Hit 320m

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Nigeria Inter-Bank Settlement System (NIBS) has revealed that the number of active bank accounts in the country increased to 320 million in the first quarter of 2025.

NIBSS: Active Bank Accounts in Nigeria Hit 320m

NIBSS also announced that the country’s cashless transactions rose to N295 trillion in the that quarter, up from N237.11 trillion in the corresponding quarter of 2024.

NIBSS disclosed this in its latest report on the country’s financial sector.

According to the data, the report highlighted the growing reliance on digital payments nationwide.

Details from the report showed that electronic payment channels were used 2.21 billion times in Q1, while point-of-sale, PoS terminals recorded 776.94 million transactions.

The NIBSS report corroborates ACI Worldwide data, which indicated that the volume of Nigeria’s real-time payment transactions will reach 19.7 billion by 2028, up from 7.9 billion in 2023.

“In Nigeria, real-time payments are quickly becoming a viable alternative to cash, historically the dominant choice for payments in the country,” ACI said.


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Edun, Finance Minister Inaugurates NDIC New Management

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Mr Wale Edun, minister of Finance and coordinating minister of the Economy,  has inaugurated Mr Thompson Oludare Sunday, new managing director/chief executive officer of the Nigeria Deposit Insurance Corporation (NDIC), and Dr Kabir Sabo Katata, executive director (Operations),  at the Ministry of Finance, Abuja.

Mr Wale Edun, minister of Finance and coordinating minister of the Economy, flanked by Mr Thompson Oludare Sunday, new managing director/chief executive officer of the Nigeria Deposit Insurance Corporation (NDIC), and Dr Kabir Sabo Katata, executive director (Operations),

In his speech during the occasion, the Minister submitted that the NDIC, as a component of the financial safety-net has a crucial role to play in the nation’s march to economic stability and prosperity.

He therefore charged the Management team to bring their diverse wealth of experience to bear on their new assignment while assuring them of the ministry’s full support in the task ahead.

Responding, Mr Sunday who spoke on behalf of the Management team, expressed appreciation to His Excellency, President Bola Ahmed Tinubu for their appointment.

He assured the Hon Minister of the readiness of the Management under his leadership to live up to expectations of the President in particular and the nation in general in the discharge of their duties.

The Management  later received by the Corporation’s Head Office with a warm welcome by the workforce.

A statement signed by Hawwau Gambo, head, Communication & Public Affairs Department, revealed that Addressing the workers on behalf the Management team, Mr. Sunday promised to work in harmony with the staff to move the Corporation to its next level performance.

He stressed that the Management’s focus would be based on the public policy objectives, functions and mandate devolved on the Corporation by the enabling law that established it.

Thompson Oludare Sunday is a seasoned financial expert with over 30 years of regulatory and supervisory experience.

Having cut his teeth with the Central Bank of Nigeria (CBN) in 1989, he went ahead to acquire high-end knowledge in Central Banking, spending 24 unbroken years in banking supervision.

While his vast experience is in the regulation and supervision of licensed institutions, his deep expertise span corporate governance, risk management and compliance as veritable tool for ensuring the safety and soundness of institutions.

He is a highly analytical and cross functional team worker with strong interest in building individual and institutional capacity for transformation and excellence.

Thompson’s skills and experience were horned by several key responsibilities and special assignments he handled for the apex Bank before his retirement as a Director 2021.

Kabir Sabo Katata, ED (Operations),  is a quantitative energy strategist and computational finance expert with strong power trading and risk management experience.

He has over twenty-eight years’ experience in the design and management of technically innovative systems in multiple industries including telecommunications, IT, energy (petroleum & power), finance and government.

He is a specialist in sophisticated financial optimization, the application of modern statistical techniques and mathematics to energy, deposit insurance and banking sectors.

Dr. Katata joined the service of the Nigeria Deposit Insurance Corporation in 2012 as an Assistant Director in the Research, Policy and International Relations Department and rose to the pinnacle of his career as Director in January 2022, before his new appointment as Executive Director (Operations).

 

 


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