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Risk in Forex Trading

on Thu Nov 05, 2015 10:59 am
Risk in Forex trading

Factors such as the size, volatility and global structure of the foreign exchange market have all contributed to its rapid success. The modern Forex trading technologies enable the taking of big profits in a short period of time: brokers provide their clients with leverages; client terminals support the function of automatic trading etc. Indeed, with Forex it is possible to become rich in a moment but it is also possible to lose everything at once.


Exchange rates volatility

Exchange rate volatility refers to the tendency for foreign currencies to appreciate or depreciate in value, thus affecting the profitability of foreign exchange trades. The volatility is the measurement of the amount that these rates change and the frequency of those changes. Price spikes can lead to financial losses. While opening a deal a trader should consider that prices are subject to various fluctuations. Therefore, it is necessary to control the opened positions or to place limit orders. 

Dynamics of prices is affected by various economic and political events as well. The release of breaking news can provoke significant price changes. Moreover, from time to time the central banks carry out the currency interventions in order to influence the exchange rate of the national currencies. Interest rates also play an important role as they can lead to the changes in exchange rates. 

The risk of using a leverage

The concept ofleverageis used by both investors and companies.Investors use leverage to profit from the fluctuations inexchange rates between two different countries. The leverage that is achievable in the Forex market is one of the highest that investors can obtain. Leverage is a loan that is provided to an investor by the broker that is handling his or her Forex account.  

The profitability of deals can be significantly multiplied if you use the assets borrowed from a broker. The higher the profit is, the greater the risks are. The losses cannot exceed the equity of a trader, but if a trader uses a big leverage, then even the slightest price movement in the opposite direction can reduce the deposit to zero. 

Technical risks

In order to control deals and to find a right moment for making a buy or a sell deal, a trader needs a computer and a constant access to the Internet. There is always a possibility of unexpected power cutoff, equipment errors or disconnection. As a rule such alternative devices as smartphones, laptops and tablet computers can be a good solution. 

Dishonest brokers

While trading on Forex there is a risk to choose an unreliable broker. Prestigious brokers are not really interested in losses of their clients. That is the reason why they try to ensure the maximum transparency of their activity and propose the effective trading instruments. Reliable companies neither deliberately change the exchange rates nor play against the client! 

Psychology of traders

 Available trading and high speed of deals execution can seem easy and simple. If you consider the trading as an exciting game, you can pay for this with your own money. A trader’s decision is influenced by various psychological factors. Therefore, it is necessary to learn how to control your emotions
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Re: Risk in Forex Trading

on Fri May 27, 2016 8:43 am
I recently heard that people had to wait for 45 days to get their withdrawal with 5Stars company? Is that true? I am really shocked to hear people waiting for so long to get their withdrawals. I am hope that I never joined them!
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Re: Risk in Forex Trading

on Wed Jun 08, 2016 9:10 pm
You don’t reduce risk like that, it’s reduce by having knowledge and experience, if anyone tells you that risk can be reduced just because of broker selection then don’t waste time with such people. I believe risk will be lowered only after you gain knowledge and experience while these features are not something that will keep the risk down forever, it might do the job temporary  and ultimately we will find the risk been there.
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Re: Risk in Forex Trading

on Sun Jul 17, 2016 2:01 pm
In my view the biggest risk in Forex, at present is wrong broker. I see so many traders lose their hard earn money just because of wrong company and we recently heard about IronFX scamming trader, so one got to be really careful with how go with selection of broker.
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Re: Risk in Forex Trading

on Wed Jul 20, 2016 3:30 pm
In my view risk is there with every business, but it depends on our ability whether we will decrease that risk or increase it and that’s through proper plans and methods, if we trade with proper planning then we could definitely do well, but if we are not good at planning then we will have obvious battle and difficulty.
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Re: Risk in Forex Trading

on Sun Aug 07, 2016 7:12 pm
I believe the biggest risk is wrong brokers; it’s where we got to be in good shape in order to work out things correctly. I faced massive battle with Instaforex in past, but luckily, I overcome all that and now I am happier.
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Re: Risk in Forex Trading

on Mon Aug 08, 2016 5:30 am
I am sorry, but mostly we are our self to blame for when we talk about increase the risk. Firstly, I do agree broker got role in how we go about things, but still, I do feel it’s a lot to do when our preparation been very bad especially with lack in knowledge and obviously not having much experience, so this is what in real terms increases up the risk, so if we make effort to gain knowledge and experience then we will automatically push our self into better zone, but without those things, it’s next to impossible to make any improvement,
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Re: Risk in Forex Trading

on Sun Sep 04, 2016 10:37 pm
If we do business then risk is going to be present, if we fear risk so much then we better stay away from trading completely. Although, as I said the risk is there and should be accepted, but one risk that must be avoided is wrong broker, as that’s one of the worst thing to go through as I have gone with joining TrioMarkets in early phase my career, but luckily I survived.
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Re: Risk in Forex Trading

on Tue Sep 06, 2016 4:43 pm
In my view it’s not just Forex where there is risk, but it’s with all business, so we need to learn to handle the risk,
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Re: Risk in Forex Trading

on Mon Oct 10, 2016 1:20 am
Honestly speaking, I believe often the risk is self-generated which is to do with wrong choice of strategies and often wrong choice of broker. I have seen in front of my eyes my friend lose out on 200 dollars with ZezOption Company while wrong strategy is equally to be blamed, If we get these two things right than there is no risk at all.
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Re: Risk in Forex Trading

on Sun Nov 06, 2016 2:31 pm
Any business will carry some kind of risks whose magnitude depends on various factors. Basically, risks can be associated with your trading capital, trading skills, market conditions, brokers, payment systems, and the work! As such, you must be very clear on the risk factors before you enter this field. When I was new in forex, IronFx scammed me of around $200 and they have gall to still have their website up and soliciting funds!
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Re: Risk in Forex Trading

on Sat Nov 12, 2016 9:03 am
hello! i would like to invite traders joit to bring a friend program from LihtForex. Claim a 10% bonus for each of your friends’ first deposit. i registered ang get my own promocode.  if you will register. this program is very profitable
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Re: Risk in Forex Trading

on Fri Dec 30, 2016 8:21 pm
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Risk is always present in business, so we need to make sure we learn to cope with it, if we don’t do that then we aren’t moving too far. I trade with LihtForex and with them; i am able to really reduce the risk factor with various features and facilities. This is especially to do with the rebate program available that gives me 50% back on all trades which is even with the losing one too, so I like it all so much and enjoy it completely.
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Re: Risk in Forex Trading

on Sun Jan 08, 2017 11:21 pm
Risk is always there, you just need to make sure you avoid wrong brokers, as through that it’s the risk that goes at unmanageable zone, I suffered heavily with InstaForex, so once you avoid wrong broker than things are automatically in easier play zone.
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Re: Risk in Forex Trading

on Mon Jan 30, 2017 8:08 am
As we all know each and every business have their own risk factor. You can’t do any business without risks. Trading options is also a business. It also has his risks. Risk is to lose your money drastically. Money often do over trading or do trade without appropriate analysis. In the result they lose their money. Moreover selecting a good option broker without research is also a big risk. I trade in lxmarkets.com. It minimize my risks in trading by losing with their bonus offer and exclusive trading types.


Last edited by susu on Mon Jan 30, 2017 4:31 pm; edited 1 time in total
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Re: Risk in Forex Trading

on Mon Jan 30, 2017 11:57 am
Never risk more than 2% per trade. This is the most common - and yet also the most violated - rule in trading. Most traders begin their trading careers, whether consciously or subconsciously, by visualizing making big amount profit. The art of trading is not about winning as much as it is about not losing. By choosing FXPRO you can always win your trades whatever the situation of market. This is the best broker.
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Re: Risk in Forex Trading

on Mon Jan 30, 2017 9:37 pm
Risk is something you just can’t make disappear. I agree with the above guy about 2% risk. I always go with ½ risk reward ratio with 2-3%, I like it a lot with this setting because of lesser risk. I do enjoy it more due to Pepperstone broker and their 50% bonus on deposit, it’s sensational and helps me in every way due to no unwanted tags of restrictions or hidden policy, so that keeps me absolutely calm and cool with working.
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Re: Risk in Forex Trading

on Tue Jan 31, 2017 5:04 am
Ok then if we trade in a wrong way it will be a risky trade for me obviously. It's not the guilty of any broker because Forex market is risky for those trader who have scarcity of knowledge as well as technical ideas. So far we can not blame on broker for this. Yes we can trade with small lot to avoid riskes. Those who think it is risky they can use this formula.
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Re: Risk in Forex Trading

on Thu Feb 02, 2017 9:45 am
Forex is totally unstable market. There is high risk in trading. But if you have sufficient knowledge of market you can easy make profit. One of the most risky things in trading is not taking proper money management. Without good risk ratio you can lose a lot. For this some broker help traders with trading. I use iTrade for this. It help me a lot to reduce my loss in forex.
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Re: Risk in Forex Trading

on Thu Feb 02, 2017 9:43 pm
Risk is there and no one needs to worry about it. The more we worry about the risk factor; it’s just going to get harder for us. I feel least concern about risk factor under FreshForex, they are awesome having 101% Trade Able Deposit Bonus to Mega Rebate and even 48% Annum scheme, it’s just so much here that how can you feel about risk? If those things weren’t enough than their cute starting up 1 USD bonus just makes your day!
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Re: Risk in Forex Trading

on Thu Mar 09, 2017 6:37 am
Forex has a high risk. If you want to do trade you should know about risk management. The difference between gambling and speculating is risk management. It’s very important that can make the difference between your survival or sudden death with your trading. The main form of risk management is controlling your losses. You should work with FXPRO broker. You can know about proper risk management with them also they are best with services.
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