Risks in forex investments?

My mother started investing in the forex market recently. I'm afraid she doesn't know what she is getting herself into, because I heard that that returns are high but the risks are even higher and can lead to bankcrupcy. So can anyone please explain briefly on how it works and its risk?
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Omg Stu G, english please.

Trading currencies is more than with stocks about risk management. I wonder if your mom has done an extensive fx course because education and experience are major keys to being successful. There's indeed the element of higher risk like with other things in life, however, brokers too are aware of that and therefore provide demo accounts or practice accounts to shape your personal strategy. I say personal strategy because in the end it's your personality and logic that's going to form your view of this huge market. Ideas and concepts derived from this view are going to be used, consciously or not, to shape a strategy. Those who don't have the patience for the latter usually get carried away by their emotions, such as fear and greed. From then on the individual becomes part of the 90% (or whatever the number is) of losers in the forex.
The risks are actually as high as the trader allows them to be. To say that the risks are higher to lose than to win is one of the many misconceptions, especially among those who had no training or had the wrong training.
You canâ€™t go bancrupt because your account is protected by whatâ€™s called a margin call. It prevents you from going below 0 or the amount of lots contained in the trade. So you only lose the amount of money deposited initially. If you deposit $1000 then that is the maximum amount you can lose (minus the margin).

-you need to be aware how many lots you are going to use compared to your balance.
-Overleveraging will wipe your account fast so this a no-no.
-Technical analysis is a viable way of trading and works, no matter what others say.
-Only use money that you can miss for a few years.
-Common sense goes a long way.
-Losses are part of the game, but the art is to make much more winners, hence risk-management.
-Thereâ€™s no such thing as getting rich quick, discipline your emotions because a forex account grows exponentially. Thatâ€™s the good part..
-Again, you need to build your own strategy to increase your chances dramatically. Use a demo account with virtual money until you get it down and never stop asking questions until you do. Copy-catting a strategy often doesnâ€™t work.

my dad also tried that, and he said his money went down the drain. It's very risky if you don't know what your doing. Be careful.

With a typical equities brokerage account, you can use margin, and are typically limited to borrowing a little more than twice your own investment, using your money as collateral. (Most equities are allowed to frop to 30% equity by a broker, meaning you own 30%, and they have loaned you the other 70% of the equity in the position.

Most brokers will liquidate your investment, if their money represents the majority stake in your investment to get their money back to ensure that they do not have to collect on a debt. That said, sometimes market movements are quick, and a stock can lose 50% overnight, meaning the 30% you owned outright, and 20 of the 70% you borrowed. You would be sent to collections.

Fast forward to Forex. Brokers will loan you up to 19 dollars for every dollar you invest. This means that a 5% movement could wipe your equity out, and anything bigger than that you would be liable for. i.e. a 50% drop would mean that you would owe 9 times whatever your deposit was. That said, the odds of a currency dropping that quickly would have to be precipitated by a pretty big event. (Catastrophe, turmoil, natural disaster, war).

Forex is much riskier, but can also bear great rewards. That same 50% movement up means that your investment could go up 20 fold.

I won't play any game where I can lose my home, so I stick with equities.

the first and very important thing is to have knowledge in what you are investing..i'm doing forex too,but all my friends also make money.
so you think first before you invest,if don't have knowledge ask people to teach how to invest in forex.i'm too a forex trainer.

60% of all traders will loose everything on FOREX. that is a fact.
Try to get her trade with Expert Advisors, that will eliminate the risk.

Depends how she got into the forex market, and what tools she is using to play it. Its unpredictable because of so many factors, what a central banker feels like in the morning, political instability, production, you are much better sticking the money into a very large company that has predictable results year after year. If you know nothing about economics, stay away from forex, you will not have the information needed to make an educated prediction.

Forex sucks, you are giving a freaking 5% to the bank everytime you make an exchange.

Here are your best answer http://www.best-seek.com

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