There are always risks to FOREX trading, even if your broker is quite reputable. All investments and transactions meet the whole set of risks because of sudden rate changes, changing market conditions and different political events.
Many factors are the reason for these forex risks. Just a few examples are: the main company's goals; the scheme how these goals are reached; the successful company's administration that guarantees its long functioning and at last ability to oppose any force-majeure with company's own resources.
Banks made up its primary participants. As communication facilities and automation were developing banks started trading "directly" without any intermediaries such as stock exchanges. Forex market's broker doesn't need any licenses and certificates for his activity as he is considered to be just a legal person. That's why Forex market on the whole also doesn't run into any "legislative limits" inside countries, and in many states is equated to the games' organization.
Many factors are the reason for these forex risks. Just a few examples are: the main company's goals; the scheme how these goals are reached; the successful company's administration that guarantees its long functioning and at last ability to oppose any force-majeure with company's own resources.
Banks made up its primary participants. As communication facilities and automation were developing banks started trading "directly" without any intermediaries such as stock exchanges. Forex market's broker doesn't need any licenses and certificates for his activity as he is considered to be just a legal person. That's why Forex market on the whole also doesn't run into any "legislative limits" inside countries, and in many states is equated to the games' organization.
So it's important to mention that there are no regulations for Forex market, even despite of great number of complicated problems and risks - such as the risk connected with market prices' changes. However, first of all, it's important to know, that broker companies can't operate in a single stock exchange in compliance with all problems and risks, in contrast to quite adaptable exchange markets.
It's absolutely necessary for any FOREX trader to know at least the main rules of technical analysis and reading financial charts, to have experience of studying chart changes and indicators and interpreting of these very charts. This is a certain way of decreasing risk and financial exposure.
Many ways to minimize risks when placing an entry order were elaborated. Among them are different types of stop-loss orders. A stop-loss order is a special code of rules explaining how one can leave his position if the currency price amounts to a certain point. A stop loss order is placed below current market price if a person takes the so-called long position and expects the price to go up. On the contrary, stop-loss order is placed above current market price if a person takes the so-called short position and expects the price to go down.
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