For people new to the Forex trade, or for that matter, stock trading or portfolio management, one of the most dangerous common lay-man' examples for the behavior of the markets is the (now infamous) coin toss chart.
The coin toss chart shows itself in books of business and economics as relevant and applicable to the Forex trade, commodity trade and stocks and bonds. In a short summary, the coin toss chart claims to show that a chart (or index) of successive coin tosses more or less matches the chart (or index) of the stock (or Forex) market movements; the conclusion is that investing in the market, whether you're a day trader or over a longer term, is an average statistical curve analysis and subject to random and unpredictable peaks and troughs. While this may be true from a statistician's point of view, often forgotten or misunderstood is the value of the input of investors to this "coin toss" game and the gains made by investors that beat the simplistic chart.
The Forex trading market is notorious, like any trading market, for it's inherent unpredictability. In so far as systems analysis is concerned, no mechanism exists for a direct input to output relationship for computing trends with high levels of accuracy. However, what cannot be underestimated is that trading is about experience, core knowledge of the workings of the market, and for the best traders, a gut instinct that sees them realize gains, and despite their best efforts, losses. Markets are not an exact science; they are also not such an inexact science that investing in the Forex market should be akin to gambling with your hard earned money.
While it is important for investors to understand that high levels of learning Forex trading is required to be an effective investor, that novices and new-comers to the Forex trading game need to be equipped and need to be very (very) aware of the real risks of loss (sometimes sustained loss for a longer than expected period), the art of Forex trading is not simply the purview of the insiders' or regular market players. The art can be learned and applied to good effect.
Thus, while we walk away from long held fears and fallacies, as entrants to an exciting avenue for investing taking on board essential Forex trading tools begins to take away the "coin toss" factor. These tools could be the Fibonacci Forex trading system, online trading systems (that come with analytical software) or just attention to the Forex news and its details. Beginners need to know that while the risks are very real, and the gains often elusive, their money is not being subjected to the whims of the casino; they are partaking in the very real world of currency trading and finance. This world brings with it centuries of real application, millions of active traders, and the assurance that while the market may not be prone to any undeniable truths or formulas, it is prone to sway and twist in someone's favor, and that someone, could be you.
