Trading foreign currencies is a challenging and potentially profitable opportunity for educated and experienced investors. However, before deciding to trade on the currency market, you need to carefully consider your investment objectives, level of experience and risk appetite. Above all, do not invest money that you cannot afford to lose.

There is considerable exposure to risk in any off-exchange foreign exchange transaction, including, but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or a currency pair.

Moreover, the leveraged nature of currency 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 requirement, your position may be liquidated and you will be held responsible for any resulting losses. To manage exposure, employ risk-reducing strategies such as 'stop-loss' and 'limit' orders.

If any of the above concepts are still fuzzy in your mind, do some research. Forex-Central.net is an excellent resourse you can refer to (including the forex glossary).