Trading foreign exchange on margin carries a high level
of risk, and may not be suitable for all investors. Before
deciding to trade foreign exchange you should carefully
consider your investment objectives, level of experience,
and risk appetite. The possibility exists that you could
sustain a loss of some or all of your initial investment
and therefore you should not invest money that you cannot
afford to lose. You should be aware of all the risks associated
with foreign exchange trading, and seek advice from an
independent financial advisor if you have any doubts.
In
general, trading foreign currencies is a challenging and
potentially profitable opportunity for educated and experienced
investors. However, before deciding to participate in
the Forex market, you should carefully consider your investment
objectives, level of experience and risk appetite. Most
importantly, do not invest money you cannot afford to
lose.
There is considerable
exposure to risk in any foreign exchange transaction.
Any transaction involving currencies involves risks including,
but not limited to, the potential for changing political
and/or economic conditions that may substantially affect
the price or liquidity of a currency.
More
over, the leveraged nature of FX trading means that
any market movement will have an equally proportional
effect on your deposited funds. This may work against
you as well as for you. The possibility exists that
you could sustain a total loss of initial margin
funds and be required to deposit additional funds
to maintain your position. If you fail to meet any
margin call within the time prescribed, your position
will be liquidated and you will be responsible for
any resulting losses. Investors may lower their
exposure to risk by employing risk-reducing strategies
such as 'stop-loss' or 'limit' orders.