Risk linked to Forex Trading

lisaadson

Junior member
11 2
Hey, guys. I'm new to trading business. Can anyone tell me the risks associated with Forex trading?
 

tomorton

Legendary member
8,403 1,338
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
691 59
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
97 29
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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guest41766

0 0
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.
 
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guest41766

0 0
if you are classed as a pro client in UK you waiver retail client privileges but get higher leverage instead.
 

hatemypips

Established member
691 59
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.
 

maby8

Junior member
49 8
Risks is found in anything you do in life, and in trading you will face risk because you can never be completely sure what is going to happen. However you can deal with risks by being careful and counteract it with analysis, gaining knowledge, and contorlling emotions. It is important to have a plan and to be careful with money as you need to avoid big losses. I suggest keeping a journal to analyse your own moves and improve upon them.
 

Henow1969

Well-known member
285 34
Forex is a risky business and the biggest risk involved in it is to lose your whole money without making any profit. If you have no knowledge and skills then it will be very difficult for you to be successful in forex. Always learn forex and make strategy and plan to go good in this market.
 
 
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