Is Forex Trading A Safe Investment?

Trading Forex is not, strictly speaking, an “investment,” in the sense that investing in a bond or a stock is. Traditionally an investment should be held for a long time to appreciate in value, and is usually a low or balanced risk, while the majority of forex trades are short term and higher risk/reward, completing in a matter of minutes or hours.

When you trade forex, you put your money at risk in an investment strategy. However, the risk can be managed with a prudent trading strategy.

The Best Forex Brokers + Trading Platforms

Broker	Our Rating	Description	Minimum Deposit	Regulation	Visit
AVATrade	4.5	Trusted, regulated broker with 10 yrs experience Multi award winning company Segregated accounts with leading banks	$100	Central Bank of	Visit Broker AVATrade Review T1 ROTW
XM Group	4.5	Free forex signals + market research Online education and webinars Fee free withdrawals and deposits	$5	CySEC, FSP, ASIC	Visit Broker XM Group Review ROTW
IQOption	5		10	IQ Option is a	Visit Broker IQOption Review
FBS Markets.	4	Split second execution No requotes Range of accounts	$5	IFSC	Visit Broker FBS Markets. Review ROTW
Plus500	4	No commissions and low spreads Advanced trading tools Minimal account fees	€100	FCA, CySec :	Visit Broker Plus500 Review T1 ROTW
HF Markets Ltd. (HotForex)	3.5	8 Trading Platforms Spreads from 0.1 Pips $0 fees on deposits	$5	FSC & CySEC	Visit Broker HF Markets Ltd. (HotForex) Review ROTW
Easy Markets	4.5	Free Guaranteed Stop Loss Segregated funds at top tier banks Fixed spreads & negative balance protection	$100	ASIC, CySEC	Visit Broker Easy Markets Review T1 ROTW
Markets.com	4.5	Tight spreads without commissions Advanced charting tools	$100	CySec, MiFID, FSA	Visit Broker Markets.com Review T1 ROTW
FXPrimus	3	Trusted by 100,000s of traders Fully licensed in the EU by CySec Tight spreads and fast withdrawals	$100	FSC Mauritius	Visit Broker FXPrimus Review ROTW
InstaForex	3.5	'Asia's top broker' Wide choice of leverage options	$1	RAFMM, The Federal	Visit Broker InstaForex Review ROTW
OLYMP TRADE	4		10		Visit Broker OLYMP TRADE Review

Broker rankings last updated 13/05/2022 23:44

As in all investment strategies, there is a ratio of risk versus return. Risk is high in forex trading, but it can be managed. 

The high level of risk stems from the number of forces that affect the global forex market.

One can understand the technical reasons for a move in a given currency, but that move may go the opposite way due to a political or even a climate event. A storm, a plane crash, an election – all of these may change the rules about what happens to your trade.

And this is why a good trader starts the day by studying the calendar of events on forex websites, and by reading the news carefully. Even then, stuff happens. That’s what the stop loss is for.

So traders manage the risk when they put money on the forex market. They make use of the limit order and the stop loss.

They watch for patterns of trading, so that they can predict market action. Technical trading is all about this kind of pattern-spotting, and, in orderly trading – and there is orderly trading on many markets when events do not intervene – it’s possible to follow, for example, a Fibonacci retracement, to let it take its course, and to take advantage of it.

Orderly trading takes place most of the time, and, as a result, putting money on the forex market is safe if you understand what you are doing. A disciplined, well-educated trader is a safe trader.