How safe is investment in forex? -

In my opinion Forex does not fall into the realm of investments. It is in the realm of speculation. And speculations are NOT safe. Actually, investments are not safe either. Some such as CDs and T-bills are safer than others such as investments in stocks but they all have risk. Taking a currency position in the Forex is a speculation that that currency is going to perform better or worse than other currencies. If you speculate incorrectly, you can loose big. Just like investment in any other asset class, there is a risk spectrum. Some the currencies of some countries have very high (positive or negative) covariances with each other. In addition, some currencies have very high loadings on on some risk factors, such as political risk, monetary risk, macro economic risk etc, while other currencies do not. Very risky. In fact, most copanies that claim to give advice in this area are not quite what they should be. Be very carefull what you do. On a scale of 1 to 6 with 1 being cash and 6 being futures and options, currency investment would be classed as a 5 - there can be a high degree of volatility so do not invest what you cannot afford to lose. Investing in foreign exchange is risky given the fact that the forex markets are highly fluctuating. You should consider all the factors such as political risks, economic risks, past results etc. You can also prefer to get into a future,forward or an option transaction. If you are going to receive or have to pay any foreign currency at future date money market hedge is also a safe bet. As you are probably aware the Forex market has the quot;potentialquot; to generate very good returns. It should be no surprise to anyone that high returns ALWAYS involve high risk. So I would say that the Forex market is certainly not a quot;safequot; investment. That being said, there are conservative strategies that can be used in the Forex market to reduce the associated risks. very difficult, have to invest big dollars to get returns, as well as the fact that there are so so so many macro and micro economic factors which have an impact, it would be almost impossible to track them all.