All form of trading carry risks and you should be aware of them. Scams is number one. The industry has done a lot of work to keep scams away and they are uncommon now, but still exist. Just make sure you research your broker before signing up to open an account. Exchange rates-this is a volatile market with fast moving currencies where in no time you can earn a lot and loose a lot. There are tools for this, stop loss orders is just one of these tools.
Credit Risk-within this trading is the possibility that either the seller or buyer can fail to keep his part of the deal. For this reason, trade on regulated exchanges where traders are monitored for worthiness. Interest Rates-Be aware of the interest rates between the two countries in question. Any misunderstanding here can be the difference between a profit and a loss.
Country risk-sometimes a country will intervene and limit the flow of its currency. This is not a common occurrence and generally seen with less often traded currencies. Once you know these five common risks you can then learn more as you go along.
