Wednesday , March 29 2023

Forex trading risks you face

Forex trading risks are always existed in Forex market, there is always risks that we should know. In this article; we will introduce forex trding  risks and how dealing with them.

In forex market, there are two things that  expose risks upon you, and your trade which are influence size (leverage), and the bad usage of stop-losing and making-profit orders.

The Forex trading risks which you face

The first of Forex trading risks : Influence size (leverage):

Forex trading risks

Leverage; you should try not to be one of the victims of this risk. Every day you are trading with a small amount such as 10000$, euro rises for 100 pips so, you will earn 100$. In the second day, you are trading with the same amount, euro rises for 125 pips, so, you will earn 125$. You would say ” if I trade with more amount, I will earn more.  (remember that you shouldn’t trade for more than 2 : 4 doubles as we said before) review Successful Forex Trading Strategy.

But, as you earn, you would feel that you are a loser in trading. You make experience so, you may say that euro will rise and you will try to break the rule of trading and trade with 100000 euro, and earn the deal. in the second day, you will trade with more amount and earn the deal, day after day you will try to trade with 500000 euro, but if you lose it, you will lose all the amounts that you earn before, and you may lose all your amount that you have. If you don’t lose and keep your amount, do you think that you can go back for trading with 10000 euro. Here is the risk, and in most cases, you can’t go back for trading with small amounts.

The second of Forex trading risks : the Bad Usage of Stop-Lose and Take-Profit orders:

Forex trading risks

If you activate stop- losing order in 100 pips less than exchange price, and 100 pips for making- profit order more than exchange price, and you found that euro has declined 110 pips so the deal is automatically closed because you activate stop- losing order in 100 pips. After a while, you find that euro has risen for 150 pips, so you would say that “if I activate stop- losing order in 120 pips, it will be okay” after several times, you will try to break the rule by activating stop- losing order in 150pips so, you earn money. The third day, you found that price has declined in 200 pips and you try to activate stop- losing order in 250 pips. Day after day, you will find that you activate stop- losing order in 400 : 500 pips, so, you will be in a certain risk if there is any loss, the loss will be very big and may reach 5 doubles more than what you expected.

So, you should never change your strategy in stop –losing and making- profit orders.

Stop- losing order safes you from losing what you couldn’t afford. Most dealers earn from small deals, and lose in big ones.

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 FBS broker 

 Exness broker  

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