Abstract
Retail Forex as an online CFD market is generally known as a high risk area for traders. This study is focused on existing risks and return possibilities in this market. Risks which may threat traders are surveyed through Liquidity, Credit, and Control, plus Market risks. Value at Risk and Moving Standardizations are applied due to market risk and risk of loss, while Momentum and Reversal effects on hourly, 4 hour and daily horizons during last 10 years are examined. Findings are indicating that Market Risk is the main risk in Retail Forex, while market risk is mostly depended to market volatilities. Also results are suggesting about the considerable performance of Reversal effect in hourly time frame of Last ten years, while studding Value At Risk measures have shown that risk of loss is related to the size of positions, not initial deposit. As a result, risk of loss of Retail FX traders can be bigger than initial deposit, since VaR measures in Retail FX can be equivalent with none levered standard contracts in foreign exchanges.
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