Is investing in the forex market risky?

Aug 22, 2022 at 12:01
Vues 1,434
31 Replies
Membre depuis Jan 25, 2022   posts 165
Aug 22, 2022 at 12:01
Forex trading is principally risky for the following main reasons:

1. You don’t have strict money management rules in place.

2. You aren’t disciplined.

3. You don’t have a precise trading plan, which you stick to.

4. You aren’t trading with a reputable broker.

5. You’re studying with someone who would rather teach than trade for himself or herself because teaching is more lucrative. (Yes, Forex is filled with scam teachers like this.)

And the list of risks can go on and on.

The biggest risk to forex trading is YOU! If you don’t treat it as a business that requires commitment, discipline and significant time to master, then you are doomed to failure. Money management is an essential part of this success. Knowing how much you stand to lose on every trade you take is critical information that you need to have before you put on a trade. And analyzing your trades to find out what the best pairs of currencies are for you as well as what times are the best to trade and what strategy works most reliably for you, etc. turns an average trader into a professional one.

Adhering to a precise trading plan is essential. You have to write out your rules and then sit patiently waiting for a trade to present itself. Sometimes you might sit for an entire session and never see your strategy manifest.

Patience and discipline are required. And once you’re in a trade that means adhering to the rules that you have set up. Not moving your stop, which increases your risk; not getting greedy and trying to squeeze more out of the trade; taking screenshots of your trade as you enter and then again when you exit so that you can do analysis afterwards and get insights into why it worked or why it failed.

You need to build up your nerve so that you can take a trade without shaking or without cursing when it fails. This is all part of the discipline that a professional trader has.

Another significant risk is finding a broker that has a good reputation and has enough liquidity to withstand the sometimes sudden and dramatic moves of the market (the recent unpegging of the Swiss Franc to the Euro is a good example of the chaos that can ensue after this kind of announcement).

FXCM, thought to be one of the biggest and best brokers in the U.S., was recently stripped of its license and banned from operating in the United States because of intentional slippage and manipulation of currency rates along with not having enough liquidity to cover the aforementioned Swiss Franc incident.

And there are other brokers who have been similarly banned in prior years.

If your money is with one of them you stand the chance of losing it all if they suddenly close their doors.
Thanks for Reading!
Membre depuis Apr 09, 2019   posts 538
Aug 22, 2022 at 12:50
Of course it is risky but you are ultimately in control of the risk you take. You can't control the reward but the risk is in your hands. This critical point is lost on many new traders.
If you can't spot the liquidity then you are the liquidity.
Membre depuis Aug 19, 2021   posts 232
Aug 22, 2022 at 13:48
Oh of course, investing in forex is risky. Just like trading, it's risky. Just like trading/investing cryptocurrencies, it is risky. Just like making deposits in some banks is risky.

All of it is risky, but that does not stop anyone.
Everyone must make a decision for himself. And if so, take responsibility for your choise.
Membre depuis Aug 17, 2022   posts 80
Aug 24, 2022 at 03:54
sebking1986 posted:
Of course it is risky but you are ultimately in control of the risk you take. You can't control the reward but the risk is in your hands. This critical point is lost on many new traders.
Traders are responsible for their own risk, and it can only reach out if they allow it. Risk management plays a key role in trading which many newbies skip in the flow.
Membre depuis Aug 05, 2021   posts 401
Aug 24, 2022 at 16:01
There will always be some risk, no matter how prepared or experienced you are. That's what makes it kind of fun, but also not the best in job in the world since income isn't guaranteed.
Membre depuis Aug 19, 2022   posts 1
Aug 25, 2022 at 10:44
Yes, forex is risky. Forex involves a significant risk of loss and is not suitable for all investors.
Membre depuis Jul 20, 2020   posts 399
Aug 25, 2022 at 15:50
CathennaHenry posted:
Yes, forex is risky. Forex involves a significant risk of loss and is not suitable for all investors.


There shouldn't be a significant risk of loss if the person has done some due diligence with a strategy on demo and then applies good risk management
Membre depuis Aug 17, 2022   posts 45
Aug 31, 2022 at 11:28
There is risk everywhere. It is obvious that if you trade, risk will follow you. It all depends on how thoroughly you analyze and study the Forex market.

Membre depuis May 19, 2020   posts 410
Sep 02, 2022 at 13:03
This title post brings together the points I've been trying to spread here on the forum for a long time. Excellent.

Before trading:
- Trading plan
- Market analysis
- Patience before opening

Trading:
- Money management
- Discipline
- Patience in following the rules

Post-trading:
- Trades analysis
- Finding mistakes
- Psychology training

Complete all of them and investing risk will be significantly reduced
@Marcellus8610
Membre depuis Jun 26, 2020   posts 327
Sep 04, 2022 at 08:03
Forex trading is a place where we actually come to make money more but become loser ultimately , because of just emotions.
Membre depuis Apr 03, 2021   posts 470
Sep 05, 2022 at 00:03
Yes, trading forex is risky, but we can control the risk, stop loss is one great feature to manage the risk, but also choosing the trusted broker is important, so when withdraw profit we felt comfortable because all withdrawn smoothly to processed.
Membre depuis Feb 15, 2022   posts 219
Sep 05, 2022 at 05:53
Watch video tutorials and apply those techniques on demo account to weld your experience.
Membre depuis Jul 11, 2022   posts 21
Sep 07, 2022 at 11:41
No matter where you invest, there is always a risk. Forex is no different from other investment opportunities. I'm just speaking from my experience. A smart person can make money anywhere. And the stupid one will lose where it would seem a 100% chance of winning.
Membre depuis Apr 03, 2021   posts 470
Sep 09, 2022 at 00:51
Trading is risky, there is a small portion of traders able to make good profit consistently in trading, skills is a big matter to become profitable, not all traders are able to manage money and make money in forex trading, and gambling will never life in the long term, psychology also influences on trading decision, weak psychology trading is bad for traders,.
Membre depuis Jun 26, 2020   posts 327
Sep 09, 2022 at 06:23
market is too much risky and no one can predict the real faction of this market with certainly.
Membre depuis Feb 15, 2022   posts 183
Sep 17, 2022 at 18:13
Short time trading has become a center of attraction among traders and I also like this type of trading. Almost all brokers allow traders with scalping friendly trading facilities and a reliable environment.
Membre depuis Aug 05, 2021   posts 401
Sep 22, 2022 at 00:14
Notandum posted:
Investment always comes with risk! Forex is risky but it's worth taking a risk if you know what you are doing.

So true! You gotta spend money to make money.
Membre depuis Aug 15, 2022   posts 7
Sep 22, 2022 at 06:32
Forex is one of the most risky investments, more so than stocks so one needs to be careful. But the overall rewards can be huge so in mu view it is worth it
Membre depuis Sep 21, 2022   posts 11
Sep 22, 2022 at 12:12
Indeed! Investing in trading is risky because neither you cannot predict the market nor you can predict the profit and loss. So, it is always advisable before trading on a live account, you need practice on a demo account and use some risk management strategies.
Membre depuis Aug 19, 2021   posts 232
Sep 22, 2022 at 15:26
MarcellusLux posted:
This title post brings together the points I've been trying to spread here on the forum for a long time. Excellent.

Before trading:
- Trading plan
- Market analysis
- Patience before opening

Trading:
- Money management
- Discipline
- Patience in following the rules

Post-trading:
- Trades analysis
- Finding mistakes
- Psychology training

Complete all of them and investing risk will be significantly reduced


Oh I think you told it from the trader's side. But not only the trader is involved in investing, lol. What then is important to keep in mind on the part of the investor? Pay attention only to experience in trading? Or statistics?
Therefore, everything is a little more complicated than it seems.
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