Dealing in the foreign exchange market is not without its risks. History shows that large sums can be lost as well as made and consequently great care is needed in dealing. In the opening part of this chapter I shall identify the different types of risk that you will be exposed to in transacting foreign exchange. Clearly some of the risks are virtually impossible to quantify, such as fraud. The purpose, however, is to provide a checklist which at least will form a base from which to make an assessment of risk.
Allied to dealing risks is control and management of the dealing function and this is developed later in the chapter. The discussion is relevant to all practitioners of foreign exchange.