The foreign exchange market, also known as Forex, is widely known as the largest trading market in the world. It is also one of the quickest markets to start trading, yet the one that comes with high risks.
The biggest and most imminent risk associated with Forex is losing your funds. Everyone’s goal after entering the market is to make profit and be successful in trading, yet the average trader is likely to lose money.
Now, while the risk of losing funds is straightforward, there are different variations of risk factors in FX trading that lead people to losses. These factors are recognised as the risk involved in forex market.
• Unpredictable market volatility risk
• High leverage risk
• Interest rate risk
• Liquidity risk
• Credit risk