Why forex? (Forex Trading Advantages and Disadvantages)
Warning: Top 4 Forex Risks Traders Should Know
Advantages and disadvantages of forex trading
There are some trading risks to consider when trading financial markets. Your money can bring you big wins or big losses. The better you understand the potential risks and how to control and mitigate them, the better you will be as a trader.
According to the report of Myfxbrokers, there are Top 4 Forex Risks Traders Should Know
This section describes some of the risks you may encounter along the way.
1. Volatility Risk
Volatility plays an important role in trading. Volatility risk represents the degree of market volatility and must be reliably included in all traders’ trading strategies. Forex Risk Volatility Risk
Many traders usually consider volatility to be a negative and uncertain risk factor, but there are also many positive factors in volatility. Without some volatility, it is almost impossible for a trader to profit from trading activities.
Usually, in high-impact news events, volatility can spike and become excessive. In this case, volatility can adversely affect the trader’s open position.
2. Credit Risk in Transactions
When trading financial markets, one should expect individuals or groups on the other side of the transaction to be willing to fulfil their financial obligations.
Credit risk exists when one party of a transaction is unable to pay the other. This can happen because one of them went bankrupt.
Credit Risk in Forex Risk Trading When trading, you need to be … READ MORE ...