Monday, 3 July 2017

Top Risks with Forex Trading and How to Avoid Them

The Forex business has become one of the most lucrative sites for profit making in the present day. It is almost a way to make money from the comfort of one’s own home and without too many other pre-requisites. With transactions amounting to more than five trillion dollars flowing through this medium, it is the largest and most liquid trading platform at present. With the potential for losses wider than one would believe here, it is important for a beginner foraying into this field to get informed about the risk involved in this profession. 

Risks with Forex

It is often advertised that Forex trading is easy and fast, allowing one to make money with nothing more than an internet connection and a computer. However, there are many solid decisions one needs to take in this area to effectively minimize potential for losses. This includes finding the right broker, installing the right trading platform and many more. 

One thing to understand with respect to the currencies exchange is that it is a decentralized market. As a result, there is no standard pricing mechanism, and varying prices could be offered by different dealers. One would need to make the right deals with the right participants to bring down the chances of higher prices and loss. 

In the following paragraphs, we’re going to be looking at this and other risks associated with this platform:

Risk 1 – Being cheated by a dealer

What the dealers do, as mentioned above, may not be unlawful or considered a scam. However, it would still lead to the exploitation of less informed players in the market. These dealers would get their clients to make margin trades and set stop orders in a manner that favors profit making for them. 

Risk 2 – Using excessive leverage

Leverage is a crucial element for profit making in online trading. Different brokers allow varying scales of leverage for their clients, ranging from 100 to as figures as high as 500. Leverage is important because if applied in the right manner, it could magnify a trader’s profit scales. However, at the same time, if not done so, it could also levy amplified losses in a proportionate measure. As a result, one of the major risks with Forex trading in Thailand is the use of excessive leverage.

Risk 3 – Being scammed by a broker

One thing that is widely known is the presence of scammers masquerading as legitimate brokers in this industry. One would need to be very cautious when making a choice for their brokerage. Check for the regulatory oversight that the broker comes under and its validity in this regard. 


With the Forex trading business, there is ample room for risks of many sorts. There are no shortcuts to avoiding losses in this arena, and one would need to test the waters and gain experience before knowing the ins and outs of this game. If you need help in this regard, then ally with a reputed brokerage firm. WesternFX provides online trading services for clients in Thailand and multiple other countries. We can give you the tools you need to escalate your skills and make more profits!

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