Risk factors to know when trading foreign exchange
- 8월 22, 2017
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Risk factors to know when trading foreign exchange
Foreign exchange transactions have more advantages than other financial investment products. However, there are various risk factors because of the form of over-the-counter market.
1. Loss of transaction
Foreign exchange transactions are not guaranteed with principal. Because of this, fluctuations in the exchange rate may cause the loss to exceed the balance in your account.
It is advisable to invest in consideration of your trading knowledge and financial condition.
2. Exchange Rate Fluctuations
The foreign exchange market should be careful of the exchange rate which changes from time to time.
Major economic news from around the world and the announcement of economic indicators are affected by the exchange rate, so thorough analysis is essential.
3. Liquidity
Because the foreign exchange market has no limit on the range of prices, Countries' currencies that are not realized have very high liquidity. There are various situations such as trading hours, natural disasters, war, political unrest, policy changes, etc.
4. Computational error
Because it is transaction using electronic transaction system, because of computer error, the order may not be concluded or unintended order may be concluded.
System, communication equipment failure, traffic concentration, etc. may cause the suspension of transactions or delays. The leakage of personal information can lead to direct damage to the investor.
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