Matthew Luke M Bailey#4

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What is operational risk in forex and how do institutions manage it?

Operational risk includes failures in processes, systems, or people that lead to losses. Examples: broker outages, fat-finger trade errors, or cyberattacks. Institutions manage operational risk with redundancy (backup systems), compliance monitoring, and disaster recovery plans. Retail traders face operational risk too—unstable internet, platform crashes, or poor broker infrastructure. Benefits: planning for operational risk ensures continuity. Risks: ignoring it leads to avoidable losses even when strategies are correct. Traders should have backup internet, multiple broker accounts, and clear error protocols. Operational risk teaches that not all trading risk is market-driven—sometimes survival depends on logistics and preparation