Trading foreign exchange on margin carries a very high level of risk, and may not be suitable for all investors and speculators. The high degree of leverage in the foreign exchange market may work against the expectations of the investor as well as for him. Before entering and investing in the world of foreign exchange, Money Language (ML) advises you to consider your investment objectives, level of experience, and risk appetite of this market carefully.

It is very likely that some or all of your money will be lost in this market so we recommend trading with the money that is unnecessary for the trader. You should also be fully aware of the risk of this type of trading.

Trading in foreign currencies is a difficult challenge for traders and investors and is likely to be profitable for educated and experienced investors. However, before making a decision to participate in the foreign exchange market, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. There is considerable exposure to risk in foreign exchange trading transaction including, but not limited to, financial leverage, creditworthiness (margins), limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. For more clarifications, the leveraging nature of foreign exchange market means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your situation. If you fail to meet any margin requirement, your position/ positions may be liquidated and you will be responsible for any resulting losses. You can reduce risks by using certain strategies, including but not limited to “stop loss orders” or loss reduction orders.

Topics discussed in ML are for informational purposes only. Any past results, published or declared, in any of the topics are not necessarily indicative of future results. Clients, members, visitors and affiliates to ML must be aware of the risks associated with trading with brokers and direct foreign exchange market as well as working in the financial and future markets. Foreign exchange is very speculative in nature, which means that currency prices may become very volatile. Foreign exchange market is highly leveraged, as low margin deposits are required, and a very high degree of leverage can be obtained in trading foreign exchange. A relatively small market movement will have a disproportionately greater impact on the deposited funds. You may incur a total loss of your money. As there is a possibility of losing your entire cash balance. Guessing in the foreign exchange market should only be for the capital that you can bear losing, and that will not affect your lifestyle dramatically.

Our past shown results are not indicative of results in the future. ML is not responsible for errors that usually occur because of poor Internet connection or interruptions in connection to certain materials or resources.

Once again, we confirm that trading foreign exchange on margins carries a very high level of risk, and may not be suitable for all investors. Before you decide to invest in the foreign exchange market, you should carefully consider your investment objectives, level of experience, and risk. You may lose some or all of your deposited money, therefore, you cannot predict that you will maintain your capital or you will not lose it. You should be aware of the risks associated with foreign exchange trading and consult an independent advisor if you have any concerns.

Therefore, ML will not bear the responsibility of any errors, inaccuracies or deletions in these material, articles, recommendations or analyses published in social media. Owners of such material bear the responsibility of their complete views and they shall not be binding to third parties. Any person who reads them shall consult the experts before implementing its recommendations or analyses. The decision and results shall be his personal and complete responsibility. As well, ML does not guarantee accuracy or completeness of the information, texts, graphics or any other items included in these material and articles. Therefore, ML will not be bound with any related incidental, indirect or private damages, including but not limited to losses, of loss of income resources, loss of profits or opportunity that may result from using such materials, articles, recommendations and analyses.

Foreign exchange market involves the risk of losses beyond your initial deposits. They are not suitable for all investors, and you should make sure you understand the involved risks and seek independent advice if necessary.

Reasons of Loss in the Currencies Exchange Market

1 – Lack of knowledge:

Most new currency traders do not spend enough time to know and learn the basics of currency movement. Therefore, they should, when there is a date for declaring economic news or important statements, exit the market by closing their open contracts and waiting until there is another appropriate opportunity to enter. The best way to enter the market is only when it is quiet thus they will avoid random trading and will have the time to think about the technical movements of the market.

2 – Entering with a large number of contracts in one batch (trading with more than 5%):

Many companies give a small margin for entry believing that this is a good advantage. They encourage you to enter more contracts at once to get more interest from you. Keep in mind that when the remaining amount in your account for use in margin is reduced to zero, the program will take you out of the market automatically and immediately and will close all your contracts and you will bear the loss.

3 – Trading Without a Plan:

Making a profit cannot be a plan for a trade. A trade plan is a work program for success. You must set your goals from the market and if you do not have a goal this means that you do not have a plan and you will lose at the end) 95 % of losers go out of the market because of they have no plans.

4 – Trading against the direction of the market:

There is a huge difference between buying at a low price before the market rise, and buying at the same price during the decline of the market. In the first case, you will have a good profit while in the second case the purchasing price is the highest.

5 – Forbearance of loss and non-use of “stop loss” tool:

If you entered into a contract while the market was moving against you, make sure to come out at a good time and do not double the loss. If the market is moving in the right direction, do not convince yourself to get out quickly because you are tired. You should consider tiredness and stress part of your work and in return do not covet much. You should exit in a suitable timing. If you do not stop loss, you do not accept the loss and this is a mistake. Losing one transaction for few points and getting back to analyses and making the right decision for purchasing again is better than losing the entire account or large percentage of it in one transaction.

6 – Trading during the economic news:

Most large movements occur before, during and after the news where the volume of circulation is huge, the quantity of contracts is very large, movements are real and take a steady trend. It is not advisable to enter the market during this period, (compare the market movement in quiet times to the times when the market is under the control of banks and not the time of rapid and random movements).

7 – Trading on an Emotional Basis:

When your market speculation is based on emotional beliefs rather than real ideas, be assured that emotions are a poor base and remember that important and good things in life cannot be performed based on our emotions.

8 – Profit by chance:

When you get an unexpected profit through a deal that seemed 100% losing, but a situation or an emergency has changed the direction of the market and you got a suitable profit, do not always expect the good surprises to occur. It is better to invest these profits in a new considered deal.

Deal with the demo account during the period of learning as a real account so as not to let the coincidence control your investment culture. There is no investment nor sustained profits by chance.