what is the pros and cons of forex trading for a newbie? What precaution should he take to avoid loses?

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1) If you are asking this question it means you have not adequately prepared to trade forex. Get some books and read them and then you won't be asking this question. Mostly it's best if you just find something else to do with your time and money as you will almost certainly just lose your money having learned nothing and done nothing very enjoyable.

2) Pros: - huge market - very liquid for major currencies - easy access to leverage Cons: - Competing against world class experts who have better data, systems, news, tools. - Very illiquid for non-major currencies. Wide spreads make profit nearly impossible. - Most FX websites are scams. Anyone claiming 90% accuracy is a liar. - Yahoo Answers is infested with forex scam sites trying to advertise bad products. - A novice using leverage usually leads to a total loss. Conclusion: - The vast majority of forex newbies lose. Recommendation: - Invest in a market where you have a better chance of success.

3) The best precaution that you, as a newbie, can take is to stay far away from this jungle. The overwhelming majority of newbies, and even experienced traders, lose money. Many get wiped out totally because in forex you are leveraging many times your investment, so a small change against you can lead to margin calls, forced covering, and huge losses.

4) Learn how to properly place stop losses from the time you enter a trade. Practice in demo before going live. Place you stop at a prior top or bottom. It's not rocket science but most get emotional and won't abide by their stop.

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