Christopher John J Nelson

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Why is financial literacy critical before trading forex?

Forex is not just charts—it’s about money management. Without financial literacy, traders fail to calculate position sizing, margin, or risk-reward. Institutions ensure new traders understand portfolio math before executing trades. Retail traders often ignore concepts like drawdown or compounding. Benefits: financial literacy helps traders treat forex as business, not gambling. Risks: poor understanding leads to overleverage and ruin. Practical steps: learn budgeting, interest rates, and basic investing before diving into forex. Traders who understand money fundamentals succeed longer because they respect capital as a limited resource.