Risk management is a prerequisite approach to manage investments. The strategy involves identifying, assessing, and mitigating threats that could impact investments and trading activities, leading to potential losses. Risk management strategies follow a comprehensive analysis of the various hazards that could determine the outcome of your investment. While risk management protects investors to a large extent, they may not eliminate them entirely. Some of the risks in FX trading include
- Market risk
- Counterparty risk
- Exchange rate risk
- Interest rate risk
- Country risk
- Liquidity risk
- Leverage risk
