<![CDATA[The rapid development of digital technology and the increasing accessibility of trading platforms have increased public interest in forex trading. However, because forex trading involves substantial risk, investment decisions may be influenced by psychological factors, social influences, and individual risk assessments. Less experienced investors may be particularly vulnerable to losses because of limited risk awareness and behavioral biases. Therefore, identifying the factors that influence investment decisions is essential. This study examines the effects of overconfidence, herding behavior, risk tolerance, and risk perception on investment decisions in forex trading, with financial literacy as a moderating variable. This quantitative study was conducted among members of the Baby Gold forex trading community in Banjarmasin. A total of 69 active members were included using a total sampling technique. Data were collected through questionnaires and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS). The results indicate that overconfidence, herding behavior, risk tolerance, and risk perception have positive and significant effects on investment decisions. Financial literacy does not significantly moderate the relationship between overconfidence and investment decisions or the relationship between herding behavior and investment decisions. However, financial literacy significantly strengthens the effects of risk tolerance and risk perception on investment decisions. Investment decisions in forex trading are significantly influenced by behavioral and risk-related factors. Financial literacy plays an important role in strengthening investors’ ability to incorporate their risk tolerance and risk perception into more informed, careful, and measured investment decisions.]]>
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