Risks Involved in Forex Trading

Risks Involved in Forex Trading

While it may seem that all the risks have been managed out of forex trading, that is not entirely accurate. Excessive use of leverage during volatile market situations may result in excessive losses, and a significant rise or drop in interest rates throughout the currency markets can affect all currencies. There are also risks in timing: the forex market is open 24 hours a day, meaning time differentials can have a huge impact on the market. There are country risks as well – instability in a political movement or even outright war can cause significant shifts in currency rates which will have a ripple effect.

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