Foreign exchange risk management is an important part of ensuring the security of transactions. It mainly includes position control, currency combination, sub-storage, stop-loss, etc. As a foreign exchange investor, you must know that any investment is risky. When investing in foreign exchange, investors must clarify the risks of foreign exchange investment and possible risk traps, and master foreign exchange risk management and avoid investment traps. risk management mainly includes risk control, risk avoidance, risk isolation, risk transfer, risk combination and self-bearing risk. The reasons for foreign exchange risk are as follows:

1. The external factors are drastically changed, and the factors affecting the changes in foreign exchange prices suddenly change greatly, such as changes in important economic indicators, coups, government policy changes, interest rate changes, etc. There will be large fluctuations in foreign exchange prices, and these fluctuations sometimes start to change if investors have not had time to react. These external factors are generally controlled by setting the stop-loss and stop-loss in advance and controlling the position reasonably.

2. Operational risk, due to investors in the investment process, due to " Greed, fear, and gambling "These psychological factors are blaming and causing losses. Because the market is changing at any time, our mentality must be adjusted as the market changes, and we must not be blind, and we are bent on it.

3. Network technology risks, because foreign exchange investment By placing orders through the network, the technical and administrative security of electronic information systems has become a more important risk technology for network transaction operations. This risk comes from computer system downtime, disk array, and other uncertain factors, but also from outside the network. Digital attacks and computer virus damage, etc.

4. According to time conditions Develop appropriate operational risks. If you have enough time to look at the board and technical analysis, you can look for more short-term gains through short-term operations. If you don't have time to look at the market, or just touch the market, you should not be a short-term operation, carefully looking for a more stable and reliable trading variety, relying on trends and support resistance When the long-term holdings in the intervention points are found, and the accumulated large profits.

Author's Bio: 

I Manisha, Market researcher highlighting the topic of " What is the Foreign Exchange Risk Management ?" Also, we provide Forex tips and Currency tips