Is Forex riskier than stocks?

[Bruce Harding]

Hello, I wanted to know about risks which come from Forex.

[Brock]

Hi,thanks for asking!

When considering all the risks involved, and comparing both, Forex is riskier because of the number of factors that influence currencies, which are the main tools of the trade at Forex. While the stock market also bears a certain degree of risk, it’s less speculative than the Forex market.

If you decide to engage in Forex trading it is advisable to know some things in order to minimize risks. One of these things is to know the historical relationship between the countries in whose currencies you are trading in, this knowledge will enable you to anticipate and predict the possible changes in exchange rates.

Second thing is to keep close track of country news and know what is exactly happening with this country on the interior and international stage. The next two pieces of advice go hand in hand. First, you should use stop-loss orders in order to prevent losing more than you would like to, and the other one is not to risk more than you can afford, always deciding the amount willing to risk prior to engaging in trading.

With this advice in mind, it is up to you to decide will you or won’t you engage in trading on Forex, if you do, bear this advice in mind and make sure that you are well informed and well aware of risks, taking necessary precautions.
 

 

[Mila Radivojevic]

Hi, thank you for asking this question! 

Yes, Forex is riskier than stocks, because the main tool of trade in Forex are currencies, which are highly volatile and susceptible to outside influences and speculation. Also, the currency market is open 24 hours, five days a week, hence it reacts more to fundamental developments. So, enhanced awareness and cautiousness are advised when trading in Forex.
 

[Ulrich Meyer]

Hi, thanks for asking!

Yes, Forex trading is riskier than other forms of trading in stocks. It can be especially riskier than stocks if you are a novice, and unable to recognize changing cycles in forex markets, which will lead to inappropriate and untimely responses and inflict losses upon a novice trader.  

Another very important factor is how the Forex market is susceptible to changes coming from outside, influenced by events that have nothing to do with the economy but still affect it.

In order to be successful, it is necessary to have a good knowledge of the market and keep a careful watch over outside events, especially events that are taking place in countries from which currencies you are trading income from.

As it is, it may look that forex is not worth getting into, but it is not so. After some time, and a period of learning, you will get used to it. And, it will be much easier for you to figure out the trends that are taking place, or trends that will be taking place in the future. After the initial losses, you will start to gain profit and will be more successful.
 

[Emma Smith]

Hello, thank you for your question! 

Currencies are the main tool of trade in Forex, and with them being highly susceptible to the outside factors, which may be political or economic. And this can influence their volatility, trade ratio, or liquidity. All of these make Forex trading much more unpredictable and riskier than regular stock trading.