Financial Independence: Myth vs Reality

The following article was written by AMarkets, a St. Vicent & the Grenadines (FSA) regulated global forex broker established in 2007.


One of the most popular and frequently used terms in various kinds of training and books for beginners is “financial independence.” “Earn $100 for five minutes a day,” “start earning on the Internet today and change your life” – advertising of such content can be seen everywhere on the Internet, especially, if your  search history contains ‘how to earn on the Internet’ queries. So, what does this phrase mean?

In the minds of the majority, financial independence is freedom from work on a schedule, highly paid remote work or investments, which bring huge dividends, which are enough for a secure life without anxieties and worries. But let’s be clear: in order to invest in classic trading instruments, for example stocks or bonds, and as a result, to receive a significant profit, initial investments in huge amounts are needed, and as a rule those who possess such sums have more effective methods of increasing their capital.

98% of the offers on earnings on the Internet are a shameless deception for gullible minds: pyramids, covered with plain legends, “ingenious” deceptive systems of the Internet casino, “win-win” forecasts for sports betting events and many other ways to take away the honestly earned money from the people. Also, in the last five years, binary options are gaining popularity – a derivative financial instrument, which is inherently closer to betting or playing roulette, cementing financial markets, among experienced traders there has been a strong negative attitude towards this instrument.

Are there any real ways to achieve financial independence on the Internet and what are they really like?

Yes, there is certainly more fraud on the Internet, but there are real ways of earning money. And one of them – well-known to many is FOREX market.

Just the same, with it is associated a large number of myths. Let’s look at them in more detail.

Forex is difficult and only for professionals

This is not quite true. Certainly, trading in financial markets entails certain risks that need to be controlled; these risks can increase at times if you approach the trading process without the proper level of preparation and due seriousness. The minimum knowledge that is needed to start working in the forex market and make the first successful transactions can be learned in less than a couple of hours a day during the week, the good thing is that the Internet has a huge amount of sensible information on this topic, and often, brokers themselves present training materials for their customers.

It’s not difficult to start trading and make several successful deals in compliance with risk management, it’s quite another matter for those who want to make trading their main source of income, this will require more serious preparation and discipline, but even in that case, the basics remains the basis for trading, and all the necessary “professionalism” is the experience in real trading and the existence of a strategy that comes with time and the ability for detailed analysis.

In this market you can not make money, only lose money

One of the most common misconceptions and mistakes is the incorrect assessment of risks in the foreign exchange market. In comparison with investing in shares of reliable companies, the forex market carries more risks, but unlike the passive buying of shares and the expectations of growth in their prices, it all depends on you in the forex market – you choose how and when to enter the market, by what volumes. Adhering to the most conservative trading strategies, you can easily earn 10-15% per month, while the risks of losing the deposit will tend to zero, thanks to such remarkable functions as stop-loss and take-profit. The rules of risk management in trading in currency markets are very simple, and if you follow them steadily, you can get the most out of your investments with a minimum of risks. Let’s return to our comparison with shares, the average annual yield on the shares of the largest companies varies in the range from 20 to 50% per year from the price increase (at best) and 3-5% from dividends, also do not forget that also, there are the stock market collapses. Compare these figures with a monthly return of 10-15%

I do not have the right amount of money to start trading

Long gone are the days when the “entry price” into the forex market was tens of thousands of dollars and was was possible in units. Technologies do not stand still and today, you can start trading with a deposit that is available for every active person’s finances. For example, the broker AMarkets does not have any deposit restrictions at all! You can start trading even with $ 10. Another issue is that the size of the deposit directly affects your ability to open trades. According to the rules of money management in the forex market, you can enter a trade on average, no more than 5% of the total amount of your deposit, and it is from the amount of these 5% interest that your income depends. Do you want to earn $ 100 per month? A deposit of $ 1000 will be enough. Or maybe $ 500? Then – $ 5000. It’s simple, and do not forget – we are talking about a conservative strategy; successful experienced traders can get 30% or more per month! These are the basic myths and misconceptions that prevent the majority from starting on their own path in the world of forex, those who started, as well, face false misconceptions about what is happening here and how to earn money. Often newcomers come with very high expectations, under the influence of advertising on the Internet or watching videos on youtube.

All of them, undoubtedly, need to moderate their ardor and compare their expectations with real data and not with advertisements. Of course, there are unique people who can double their deposit in a couple of days, but in general statistics tell us that if a beginner trader makes 10% per month for the first month, this is an excellent result, because this is just the beginning and you need to learn everything, including making their first mistakes and making them “right”. Secondly, and of importance, may be the first misconception about the forex market – this is an incorrect psychological attitude to trading. Many newcomers, especially those who previously traded for a long time on a demo account refer to real trading as a kind of game, hoping for luck more than the results of calculations and analysis. This is wrong and prevents us from making the right decisions. Beginning traders should understand that the impact in the case of forex is reduced to zero. Any price movement does not just occur, and it is not necessary to gamble this process, but to strictly follow the algorithms of its strategy and money management. From this point follows the next – excitement and greed. Anyone can chaotically open several profitable trades, close them in the black and fall into the trap of excessive confidence in their abilities. Euphoria from the first profit can force the trader to open more trades, often ill-considered, and suffer losses, which in turn will cause the desire to “recoup” and open more trades. It turns out as a vicious circle. How can it be avoided? The answer is simple, and it has already been described above: trading is not a game, it’s a job, and the attitude to it must be serious accordingly. Do not violate the rules of money management, strictly follow your strategy, and do not forget about stop-loss. Do not overestimate your competence, expand your knowledge, gradually become an experienced trader. And the most important point that I have saved for the last is your broker. It must be reliable, very reliable. And preferably – the best!

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