Aaron555 Roberts

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What is algorithmic risk management in forex?

Automated systems must integrate risk controls like maximum drawdown limits, equity stops, and dynamic position sizing. Institutions program risk modules that override strategies when thresholds are breached. Retail traders often overlook risk coding, leading to runaway losses. Benefits: consistent discipline and capital protection. Risks: coding errors or missing safeguards. Automated risk management ensures survival—without it, even profitable strategies can destroy accounts. In forex, automation magnifies both opportunity and danger; risk coding is the shield.