Is The Forex Market Risky ??

Forex is sometimes described as one of the riskiest financial markets. However, the volatility of currencies rarely exceeds 1-1.5% per day and risks are only high when unreasonable leverage is used. By choosing the leverage size traders actually determine their risks themselves. We do not recommend our clients use leverage higher than 1:5. The Forex market is a highly speculative market. Hence, the ability to analyze price bahavior becomes an invalubale asset for any trader.

How Does 1 Analyze Forex ?

In essence,

analyzing the Forex market requires understanding price movement on financial markets. There are two types of analysis used in the financial markets: "fundamental" and "technical". While technical analysis gives the trader a grasp of patterns of movement in the market, fundamental analysis explains the reasons behind movements in the market and attempts to predict changes in price and market trends. A fundamental analysis takes into account the economic conditions of the countries whose currencies he or she trades, follows political events and trends in the world, and reacts to emergency news. Whatever method you prefer, the reality is that it has become increasingly difficult to be a purist of either persuasion. Fundamentalists need to follow the various signals derived from the changes in price on charts, while few technicians can afford to completely shrug off incoming economic data or critical political decisions. For example, if one looks at the chart that shows EUR/USD moves over the recent war in Iraq, it becomes obvious that victories of the Coalition forces meant a stronger Dollar and a weaker Euro. Conversely, military failures resulted in a decline of the American currency, and a strengthened Euro.