Although foreign exchange investment is still a new industry in China, its unique margin trading system and all-day trading hours can easily attract a large number of participants. At the same time, the risks of foreign exchange transactions are also highlighted. What are the risks of foreign exchange trading? [1] Margin risk. Foreign exchange trading adopts the margin system, which can even provide leverage as high as 500 times on many platforms. High leverage brings high returns, and it is bound to be accompanied by high risks. When the judgment of the market is wrong, the losses caused by the transaction will be magnified hundreds of times. Therefore, foreign exchange trading has a very good sense of risk control for traders. Controlling positions in an appropriate proportion and stopping losses and taking profits are the most basic requirements. [2] Political risk. Changes in a country's political and economic policies and environment usually have a strong impact on its currency. The change of political parties will often bring about changes in economic and financial policies, which will make traders change their expectations of the national economy and show them directly in the market. Foreign exchange traders need to pay more attention to major news events at home and abroad. [3] Exchange rate risk. Most foreign exchange transactions are finally settled in dollars. Domestic traders also need to face the exchange rate changes of RMB against the US dollar, and the appreciation of the US dollar will bring about an increase in real income. In addition to interest rate risk, credit risk and broker risk, domestic traders also need to be cautious. The risk in the foreign exchange market is far greater than that in the stock market, so it is the top priority for every trader to establish his own risk control system.