Anthony Jack_ Morris#47

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What is portfolio rebalancing in forex?

Portfolio rebalancing involves adjusting the allocation of trading capital across currency pairs or asset classes to maintain target risk levels. For example, if one pair becomes overexposed due to strong trends, a trader may reduce its weight and redistribute capital to other opportunities. Rebalancing helps maintain diversification and prevents concentration risk. It is especially important for traders managing multi-asset portfolios that include forex, commodities, and indices. Regular rebalancing ensures long-term stability and alignment with strategic goals.