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
XM	5	Free forex signals + market research Online education and webinars Fee free withdrawals and deposits	$5	CySEC, FSP, ASIC	Visit Broker XM ReviewROTW	Risk Warning: Your capital may be at risk
Plus500	5	No commissions and low spreads Advanced trading tools Minimal account fees	€100	FCA, CySec :	Visit Broker Plus500 ReviewT1 ROTW	Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
eToro	5	The leading Social Trading platform with 4.5m traders Follow other traders or be a leader Personal service and VIP perks	$200	FCA, CySec, ASIC	Visit Broker eToro Review	Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
IQOption	4.5	Stylish & Powerful Platform Trade Bitcoin + 12 Other Top Cryptocurrencies Plus Forex, Options, Stocks & ETF Trading	$10	CySec	Visit Broker IQOption Review	Risk Warning: Your capital may be at risk
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 ReviewT1 ROTW	Risk Warning: Your capital may be at risk
LCG (London Capital Group)	4.5	World class trading platform Expert market analysis FCA Regulated and traded on the LSE	0	FSA	Visit Broker LCG (London Capital Group) ReviewT1 ROTW	Risk Warning: Your capital may be at risk
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 ReviewT1 ROTW	Risk Warning: Your capital may be at risk
Markets.com	4	Tight spreads without commissions Advanced charting tools	$100	CySec	Visit Broker Markets.com ReviewT1 ROTW	Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
ETX Capital	4	Choice of two professional trading platforms – TraderPro and MT4 Free trading course for deposits over £1,000 Choice of Forex, CFDs, Spread Betting and Cryptocurrencies	€100	FCA	Visit Broker ETX Capital ReviewT1	Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79.6% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
FBS Markets.	4	Split second execution No requotes Range of accounts	$5	IFSC	Visit Broker FBS Markets. ReviewROTW	Risk Warning: Your capital may be at risk
InstaForex	3.5	'Asia's top broker' Wide choice of leverage options	$1	RAFMM, The Federal	Visit Broker InstaForex ReviewROTW	Risk Warning: Your capital may be at risk
EXNESS (NZ) Ltd.	3.5	Instant fund withdrawals - no commissions Tight spreads from 0.1 points Unlimited leverage	-	FDR (NZ), CySEC	Visit Broker EXNESS (NZ) Ltd. ReviewT1 ROTW	Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74-89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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) ReviewROTW	Risk Warning: Your capital may be at risk
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 ReviewROTW	Risk Warning: Your capital may be at risk
OLYMP TRADE	2		10		Visit Broker OLYMP TRADE Review	Risk Warning: Your capital may be at risk

Broker rankings last updated 16/01/2019 00:27

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.