Fraud Risk

Another type of risk which you need to be aware of as a forex trader is fraud risk.  In the early days of on-line trading fraud was more rampant in the forex industry.  In recent times, there have been significant improvements in weeding out unscrupulous brokers.  In an attempt to reduce your chances of working with an unscrupulous broker, you should research the forex broker that you doing business with.

Also as noted earlier, you should find out if the broker is regulated within the country that they are doing business in.  With a little research online you can find a good deal of information pertaining to well established and not so well established forex brokers. 

In closing, to be successful as a forex trader you need to fully understand the different type of risks you face, and how these risks can affect your trading positions.  Managing risks in forex is your primary task as a trader.  Many of the risks discussed within this article, if properly monitored and factored into your trading strategy, can help you protect and grow your trading portfolio. 

However, many traders simply do not factor in any of the important risks discussed in this lesson. Yes it can be overwhelming trying to understand margin risk, political and economic risk, interest rate risk, exchange rate risk, volatility risk, credit risk, operational risk, broker risk and devaluation risk.  But who said a trader’s job is easy? These risks should be carefully monitored and considered as part of your trading plan. 

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