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The Pros And Risks Of FOREX Trading

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Currency is one of the riskiest forms trading on the internet. In this trade, there is a higher probability for losing than winning. According to statistics, 95% of FOREX traders lose and only 5% of them win in the trade. Some of the risks involved in currency trading include;

• Leverage Risks
• Interest Rate Risks
• Counterparty Risks
• Country risks

Without a comprehensive risk mitigation strategy, any risk can result in the loss of your entire investment. But despite this, many people still would like to try their luck with FOREX trading, simply because the rewards from it can be mind-blowing.

With a proper trading strategy, you can make profits in the tune of six figures and above annually. Did you know that FOREX is one of the …show more content…

After all, you can't set out on a journey without any idea of where you are going or how you intend to get there, can you?

Likewise, you should have definite and precise goals in mind as to what you would like to accomplish both in the short run and long run as far as FOREX trading is concerned. Your trading approach should not only be capable of realizing those goals, but it should also match your personality.

Each type of trading approach has a different risk profile, which needs a different attitude as well as methodology to succeed in FOREX trading. For instance, if you can't risk going to sleep with an open position in the market then you might want to consider day trading. Nevertheless, if you have currency that you think will benefit from the appreciation of a trade over a period of time, then you might want to become a position trader.

Just ensure that your personality fits the trading approach you choose. If your personality doesn't match the approach, that might lead to a lot of stress, which can hinder you from making good trading decisions hence losing.

2. Go with a Reliable Broker

The type of broker that you choose can influence the outcome of your trade. If you select to work with a bad broker, there is no doubt that you will fail. If you pick a good broker, on the other hand, chances are high that you will succeed.

So how do you determine a good FOREX broker and a bad one? It is simple, a good broker offers

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