Risk linked to Forex Trading

tomorton

Legendary member
8,143 1,227
The usual trader-derived risks apply - poor TA, failure to use a stop-loss, over-sized positions, lack of exit strategy.

The forex pairs are less subject to shock from fundamental economic / sector events / news, new sector-related legislation / regulation, tech discoveries etc.. Compared to stocks, there is no risk from acquisitions, fraud or changes to index constituents. Compared to stocks and commodities there are no issues with physical supplies of component parts or compounds.

I would say that forex is not an easier way to make money but there are fewer ways to get wiped out.
 

hatemypips

Established member
604 46
Hey, guys. I'm new to trading business. Can anyone tell me the risks associated with Forex trading?
Use of high leverage combined with unfavourable market conditions such as high volatility (which is basically noise) leave your position basically unprotected against market ebbs and flows. So reducing leverage you also mitigate financial risks (but forced to expect lower returns in exchange).
 

WalletInvestor

Member
52 11
The biggest risks occur when someone comes to forex without adequate knowledge or the idea that they will get rich quick and easy. Ads and internet hype sometimes promote this notion, only emphasizing that the market is huge and instilling fomo in people.

Also, don't trust anyone who wants to tell you exactly what to do. I'm thinking of EA's, trading systems for sale, etc. Those rarely result in anything good.
 
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0FXTrader0

Active member
134 14
The risk is if you are not classed as a retail client by your broker you can lose more than your initial investment on a adverse price movement.
 

0FXTrader0

Active member
134 14
if you are classed as a pro client in UK you waiver retail client privileges but get higher leverage instead.
 

Ironfis

Newbie
8 0
Big risks arise when you stop developing yourself and start acting according to other people's strategies.
 

hatemypips

Established member
604 46
The main reason risk is that you will run out of money before you run out of ego.....

Indeed, the ability to confess own errors is important but even more important is to accept the fact that you can be mistaken thinking you make a mistake! (closing in loss but being eventually right and missing huge win!). It makes me extremely emotional and prompts to find opportunities to revenge.
 
 
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