Is investing in the forex market risky?

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!

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.

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.

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.

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.

Yes, forex is risky. Forex involves a significant risk of loss and is not suitable for all investors.

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

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.

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

Forex trading is a place where we actually come to make money more but become loser ultimately , because of just emotions.

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.

Watch video tutorials and apply those techniques on demo account to weld your experience.

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.

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,.

market is too much risky and no one can predict the real faction of this market with certainly.

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.

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.

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

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.