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Forex or stocks, which one is more risky 30 replies

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why forex is so risky?

Quoting louiseking
Well, that’s what the basic nature of the forex market is. But the traders who understand that they can’t win without taking risks often end up becoming successful forex traders. Proper risk management and money management strategies can help you do better in the market.
you gave exact information, only a prefect money management can bring good amount of profit by any strategies , so we the traders first of all have to develop our money management.
Quoting FahadMD
{quote} you gave exact information, only a prefect money management can bring good amount of profit by any strategies , so we the traders first of all have to develop our money management.
As you know, perfection is unattainable.
what you think the money management policy works for all time in this market place ?
Money management is a subset of your trading strategy and does make a big difference, yet does not guarantee success of your strategy.
Every investment is a certain risk and a trader can control the risks that he or she bears during their trading process. One of the biggest mistakes made by the newbies in trading is rhe fact that they don't measure and calculate their risks before opening a deal. Every operation connected with the money hides certain hazards and if you made up your mind to gain profits from such operations, then you need to be in the know and you should do your best in order to hedge and secure your possible losses. More than that, the risks can be reduces with the help of money and risk management. I mean that if the risk is too high for you you can either abandon the thought of opening a deal or you can also make a smaller position size which will not let you waste much within one deal. In addition to that, there are also certain risks from the side of the brokers. There are many scam brokers which attract unexperienced traders by their super cool trading conditions. These risks should also be taken into consideration during the process of choosing a new broker for you. Surely, the vast majority of brokers are decent and honest, but there will always be some room for the scammers, unfortunately.
Quoting Felolas
Every investment is a certain risk and a trader can control the risks that he or she bears during their trading process. One of the biggest mistakes made by the newbies in trading is rhe fact that they don't measure and calculate their risks before opening a deal. Every operation connected with the money hides certain hazards and if you made up your mind to gain profits from such operations, then you need to be in the know and you should do your best in order to hedge and secure your possible losses. More than that, the risks can be reduces with...
its a fine reply with good information , got some fine lines , actually risk ratio maintaining is a very tough game , need a very long term experience with exact prediction ability . for that reason beginners level always fail to make a perfect risk management.
The volatility of the market is one reason behind the risk involved in it. Although we can’t really control the volatility, we can still manage the risk by following different risk management strategies, such as, setting up a risk-reward ratio, using stop loss, limit orders and by avoiding the use of high leverage.
Quoting Epeolatry
The volatility of the market is one reason behind the risk involved in it. Although we can’t really control the volatility, we can still manage the risk by following different risk management strategies, such as, setting up a risk-reward ratio, using stop loss, limit orders and by avoiding the use of high leverage.
sometimes most powerful analyzing risk management works to fail , this is a real character of this market.
Every activity which can potentially bring you money is risky. The matter here is the grade or level of this risk. Forex trading is so risky, because the potential income isn't limited. You can earn millions here, however for this objective you perhaps have to learn a lot and practice a lot. Yo will never earn lots of money without any proper learning and practicing, it's impossible to reach heights without knowledge and experience and all people know it. It doesn't relate to forex trading, it relates to all activities in our world actually. So, I believe that if you will comply ith risk management practices, you will reach hegihts.
Quoting Henry520
you focused on money management which can reduce the percentage of risk ratio, i agree but sometimes all trading approach works to fail above all when market moves at random. so time to time we have to develop our trading strategies including MM. thanks
Any business is risky business
yes there is no way to avoid risk when doing any kind of business . so we should be more expert about self control including risk management, otherwise sufficient investment can be useless.
Forex volatility is the cardinal factor for the risk indeed. Every professional trader here trade maintaining proper risk management strategy. The higher the risk management strategy is, the lower the risk is. Traders must be cautious about managing lot size of trading because it has role in lowering risk.
after having good risk management sometimes the result of trading can be useless , because market is too much volatile and no one can predict the market.
Quoting luckymacc
Forex is risky when you put your hard earned money at stake without understanding how the market works. It’s you who have to put in the hard work of learning to manage your risks. However, If you are not doing anything to make your strategies work, I don’t think it is right to blame the market for being a risky place to make money.
It seems to me that no one has to blame the market, everyone understands what risks are.
You reduce your risk by investing instead of trading.
Totally agree!!! it is risky. Trading is not a game where you always win, sometimes you lose too. but the question is how small you lose when you're wrong and how big you win when you are right. it is a zero sum game, somebody wins, somebody loses. its about how you minimize your risk and manage to get out without losing more than 2% in each trade. Completely depends on your winning ratio. But all of the above are nothing if you never work on your psychology. because market moves are psychological.
Have a proper risk management and avoid high volatility for start.

This might help:
Inserted Video
Money management, a proven strategy and strong mindset are really the very important to successful trading
Forex is risky because traders can’t understand the market well. They don’t know how to use leverage and random selection of trades and account types also increase trading risk. To avoid this risk, there is no substitute to learning because it helps them grow their trading skill benefiting them ultimately.
90% of retail traders lose money as a subset across investment vehicles, when taken through a horizon of at least four consecutive years and longer.

This has been studied all over the place, a good one was done iirc, in Brazil about 10 or 15 years ago.

I have a few related articles saved from research I had done for a friend, and sections of old blog posts/book ideas:

https://papers.ssrn.com/sol3/papers....act_id=3016144 "In High Leverage Retail FX Market, the Margin Call Rate is 35% and It is Difficult for Individual Traders to Survive."

https://papers.ssrn.com/sol3/papers....act_id=2535636 "Learning Fast or Slow?"

https://papers.ssrn.com/sol3/papers....act_id=3957785 "Factors Influencing the Trading Results of Forex and Crypto Traders in Africa", this a more recent one I just saw.

https://papers.ssrn.com/sol3/papers....act_id=2795927 "Retail FX Trader Survey Results"

https://papers.ssrn.com/sol3/papers....act_id=2711214 "The Retail FX Trader: Random Trading and the Negative Sum Game"

Certainly not the only articles on the subject, Google returns hundreds of pages on these subjects.
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