Risk management is a cornerstone of sustainable Forex trading and brokerage operations. For traders, it involves strategies to limit losses and preserve capital. For brokers, it extends to managing market exposure, liquidity risks, and operational stability.
Without proper controls, leverage can quickly turn small market movements into substantial losses. Brokers must implement systems that monitor margin levels, enforce stop-out rules, and track overall exposure in real time. These measures protect both the broker and the client from extreme outcomes.
Strong risk management also builds trust. Traders are more likely to stay with a broker that demonstrates transparency and stability. Over time, this trust contributes to higher retention rates and a more resilient business.