Forex Trading

Various risks about profits in Forex

 

Various dangers of profits :

Experienced Forex traders keep their losses small and receive big gains when their currency is validated.

However, most retailers do this in the opposite direction and make small profits in a number of situations.

But then they hold on to a losing trade for too long and cause a big loss.

This can also lead to more loss than your initial investment.

 

Platform or performance glitch :

Imagine your ordeal if you have a large website and are unable to close a deal due to a system crash or system failure.

Which could be anything from blackouts to internet overloads or computer crashes.

This category will also include exceptionally volatile times when orders like stop loss do not work.

For example, many traders had tight stop-loss orders in their short-term positions in the Swiss franc.

This is before the currency rose on January 15, 2015.

However, this proved to be ineffective because liquidity dried up even as everyone was sealed to close the franc positions short.

There is no specific information the largest Forex trading banks have huge trading operations related to the world of currencies and have an information advantage.

For example, commercial forex flows and secret government intervention, which are not available to the retailer.

 

Currency fluctuation :

Remember the example of the Swiss franc.

High degrees of leverage means that commercial capital can be depleted very quickly during periods of unusual currency fluctuation.

As these events can come suddenly and move the markets before most individual traders have the opportunity to interact.

 

OTC market :

The Forex market is a decentralized and decentralized prescription market like stock or futures markets.

This also means that Forex trading is not guaranteed by any type of clearing organization, which can lead to counter party risk.

 

$ 6 trillion a day in Forex trading :

While the off-exchange foreign exchange market is decentralized, it is huge.

With data from the central bank’s survey every three years for foreign exchange for 2019.

This shows that currency trading is more than $ 6 trillion a day.

 

Market fraud and fraud :

There have been occasional cases of fraud in the Forex market, such as those for safe investment.

Which disappeared with more than a billion dollars in investor money in 2014.

Market manipulation of Forex rates was also widespread and included some of the biggest players. In May 2015.

For example, four major banks were fined nearly $ 6 billion for trying to manipulate exchange rates between 2007 and 2013.

The total fines imposed on seven banks amount to more than 10 billion dollars.

 

The bottom line :

If you still want to try your hand at Forex trading, it would be wise to use some precautions.

Such as limiting leverage, stopping loss, and using reputable Forex brokers.

Although the odds are still stacked against you, these measures may at least help you level the field somewhat.

Of course, if the trader is using long-term trade then the euro is at 1.20, and he uses 50: 1 leverage.

It came out of trading at 1.10, for a potential loss of $ 25,000.

In some external jurisdictions, leverage can reach 200: 1 or even higher.

Since excessive leverage is the biggest risk factor in retail Forex trading, regulators in a number of countries accept it.

Previous post
Can Forex Trading Make You Rich?
Next post
Forex market and learn about trading methods for companies

Leave a Reply