How can the risk be managed?

A limit order sets the maximum price that the investor wants to pay in a transaction, along with a minimum price to be received in exchange. The forex marketplace is so liquid that it is easy to execute stop-loss and limit orders.

Among the most common risk management tools in Forex trading or every other trading for that matter are the stop-loss order and the limit order. The stop-loss order instructs the broker that a position immediately be sold off at a certain price so as to protect against dramatic changes in prices tah would counteract the position.