There are numerous things that can influence your trading and the outcome of your positions. Today, the internet is full of different types of information about the financial markets, promising to give traders the perfect insight into everything they should know.
As much as education and knowledge are important for traders, it can quite easily become very overwhelming, which can affect not only your decision making capabilities, but it can also hinder control over your emotions.
Access to an excessive amount of information and the consumption of unnecessary facts about the financial markets, which can include headlines, social media posts, or even YouTube videos, can lead to Forex (or other) traders making the wrong decisions.
Financial porn refers to this excessive information that just does not stop. The term is used very frequently in the financial markets to describe the information that keeps ongoing, and in turn, it has a huge, negative effect on the individual, retail traders.
Because the financial markets are already very risky, when you are open to excessive information (which, in many cases, is not accurate), the situation can get quite dangerous. But, it does not mean that you should not learn more about the Forex trading market.
It is all about balance. The thing is, without the necessary information and knowledge of the financial markets, it is impossible to become a successful trader. Checking guides and reviews of TopForexBrokers can actually be quite helpful to receive very detailed, yet informative information about the market.
In the Forex trading market, too much information can be very overwhelming. This is especially true for Forex traders without much experience in the market. If you are a beginner Forex trader, you should make sure that you are using only the most trustworthy information sources, before you start trading.
Understanding Financial Porn
Financial porn can be quite dangerous for traders because of numerous reasons. It is something that is mostly used to describe different types of news releases that are causing traders to open irrational buying and selling positions, which can be very harmful to traders’ portfolios.
In most cases, the media is using headlines that are designed to catch the eyes of investors. While beginners believe to have been informed about something very important, the news in most cases turns out to be just a regular development that can have little to no impact in the long term.
The same can be said about the posts on social media. There are many pages, as well as individual accounts on social media that are making very frequent remarks about the financial markets and the ongoing events.
Many retail traders fall victim to following these reports and they are making trading decisions according to them. As a result, many of them end up losing their money. The term does not have a long history, it was first used by American finance writer, Jane Bryant Quinn, saying that these types of releases expose traders to great risks.
Examples of Financial Porn
There are many things that can be classified as financial porn. Everything containing too much information (maybe even inaccurate information) that causes traders to take uninformed steps can be seen as financial porn.
For example, this can be a constant advertisement of easy-to-use trading strategies or products that can be used to turn just a few dollars of investments into huge fortunes. It can also be the media coverage of the best, latest sector trends, that are mostly using buzz in the financial markets.
Then, there are newspaper posts that call on investors to buy the 5 or 10 must-own stocks, or any other assets, for a certain period of time. Identifying financial porn is quite easy. In most cases, they are created to make everything seem easy – designed to make traders excited about investments.
In most cases, they are popularizing active trading and are exaggerating the facts. Something that traders should keep in mind is that financial porn can be anywhere – TV, social media, magazines, newspapers, and so on. Because of this, you should be able to tell when you are dealing with financial porn, to make sure you are not falling victim to it.
There are numerous challenges associated with financial porn. One of the biggest problems of it is that it mostly offers a very general outlook of the financial markets.
What To Do?
When it comes to avoiding financial porn and its negative influences, one thing that traders can do is to learn how to tell when they are dealing with financial porn. Another thing to do is to find a source of information that you can truly trust.
Just because there are some media outlets that do not do their job with honesty does not mean that you should give up on fundamental analysis altogether. There are many good sources of information online that can help you become better at trading and make more informed decisions.
