The topic is not easy, that’s for sure. If you are reading this, it is likely that you are either an experienced trader, or have just started your path on Forex, or maybe you are just trying to figure out whether this is suitable for you or not.
Whichever of these categories you belong to, you at least once asked yourself this question: what is the risk of trading on Forex?
And while some bloggers, brokers or experts will compile huge lists of risks, Fort Financial Services believes that there are 3 of the most important risks that need to be considered.
Since trading in Forex has become available to private investors, the reputation of this industry has suffered greatly because of fraudsters and brokerage firms that did not follow the rules, exposing customers to unnecessary financial risks and which caused many people to suffer. Crimes have always been a part of our world, so Forex has strengthened control, creating a more transparent and secure market.
Forex stands for Foreign Exchange market (foreign exchange market), which can be understood as the foreign exchange market. Any currency in which Forex is traded belongs to a specific country (except cryptocurrency).
The value of a currency depends on the economic strength of the country to which it belongs. If the country is in default, the national currency will fall. If the country has a high rate of inflation, the currency will cost less and less every day. And vice versa, if economic growth is seen in the reports of this country, the currency will most likely start to grow in relation to other currencies.
Interest rate risk:
Macroeconomic decisions, such as changes in interest rates or the introduction of programs to stimulate economic growth, have a strong influence on currencies. Raising rates strengthens the local currency due to capital inflows in the light of higher returns on investment, while lowering rates has the opposite effect.