In this part of our training, we will discuss the main risks investors face while trading in the forex market. Many new investors who have little or no prior trading experience often do not fully understand what bid and ask prices actually represent. As a result, they may think they are buying when in fact they are selling — or believe they are selling when they are actually buying. In forex markets, brokerage firms act as market makers, while investors are price takers. This means that the bid price shown on the trading platform represents the price at which the investor can sell, and the ask price represents the price at which the investor can buy.

Another key risk investors should be aware of is slippage, also known as price deviation.
This occurs when a trader places a market order to buy or sell, but due to sudden price movements, the order is executed at a different price than expected.

To understand how slippage occurs, it’s important to know how interbank markets operate and how prices reach investors.
Just like in Borsa İstanbul (BIST) or VIOP, liquidity in interbank forex markets is formed by the quotes sent to the network by banks and liquidity providers. Before major economic data releases, many passive orders in the interbank market are canceled, which reduces liquidity. As a result, the spread (the difference between bid and ask prices) widens, and prices may change very quickly. When this happens, a trader sending a market order may end up buying at a much higher price or selling at a much lower price than intended — an unpleasant surprise for the investor. Therefore, during low-liquidity periods, it is best to avoid placing active orders. This risk also partially applies to stop orders, which are considered semi-active orders. However, limit orders (passive orders) do not face negative slippage since they are executed only at the specified price. It’s also important to note that stop orders in international forex markets do not carry a price guarantee and may fail to execute at the exact stop level during fast-moving markets.

Another crucial point to understand is that forex orders remain valid until canceled, unless stated otherwise. If you place an order and then forget about it, you might later discover that a trade was executed unintentionally. On the QNB Invest MetaTrader 5 platform, it is possible to set pending orders that are valid only until a specific date and time, allowing investors to manage their positions more securely.