Foreign exchange trading is one of the most risky types of investments
Question:I lack knowledge of foreign exchange.I heard Forex trading is one of the most risky types of investments.Why?
Answer:Whether you realize that Foreign exchange trading is one of the most risky types of investments out there (maybe right behind commodities trading). Foreign exchange is popular these days because it is possible to have large gains in a very short amount of time. The way this works is that Foreign exchange uses leveraged trading. A 100-1 leverage means that with US$1000, you can control a $100,000 position against the yen, for example. This is great if the market moves in your favor. However, if the market moves against you, even the slightest move can wipe out your entire account.
Mutual funds, stocks, and bonds are the much safer route to financial stability.
Okay, with that said, you are probably acutely aware of my take on Foreign Exchange.
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