The Risks of Trading in the Forex Market

Warning: The risk of loss in trading Forex contracts can be substantial.

Trading Forex with leverage multiplies risk many times over. You should not trade Forex or hire a Forex fund manager to trade Forex on your behalf if you can not afford to lose your entire Forex investment. In order to achieve spectacular returns, Forex traders must increase their leverage and therefore the risk exposure will be much higher as well.

You must understand the risks associated with Forex trading so you can make an informed decision before investing if you are considering participating in this market.

The risk of Unpredictable Market moving direction
No one, including Forex-MA.com, can predict with certainty which way the market will go, and the Forex market is volatile. Fluctuations in the foreign exchange rate between the time we place the trade and the time we close it out will affect the price of our Forex contract and the potential profit and losses relating to it.

The risk of losing your entire investment
If the price moves in an unfavourable direction, high leverage can produce large losses in relation to your account balance. In fact, even a small move against your position may result in a large loss, including the loss of your entire Forex investment.

The risk with Forex broker
Retail off-exchange Forex trades are not guaranteed by a clearing organisation. Furthermore, funds that you have deposited to trade Forex contracts are not insured and do not receive a priority in bankruptcy. Even customer funds deposited by a dealer in a FDIC-insured bank account are not protected if the broker goes bankrupt.

With our special Forex fund management system, we can limit the loss of our Forex managed accounts to 20% even if the Forex broker goes bankrupt. Please contact our manager for more details.

The risk of trading platform failure
We are using an Internet-based or other electronic system to place trades, some part of the system could fail. In the event of a system failure, it is possible that, for a certain time period, we may not be able to enter new orders, execute existing orders, or modify or cancel orders that were previously entered. A system failure may result in loss of orders or order priority.

The bottom line is Leveraged Forex trading offers opportunity for both extraordinary returns and devastating losses.