Volatility Risk

Volatility plays a significant role in accessing foreign exchange risk.  Volatility risk describes the degree of fluctuations within the markets and should certainly be included in a trader’s thought process. 

Although many forex traders generally look at volatility in terms of being a negative uncertain risk element, there are many positive components of volatility as well.  Without at least a certain degree of volatility, it would be nearly impossible for a trader to benefit in their trading activities.  It’s usually during high impact news events that volatility can spike and become inordinately high. It is especially during these times that volatility can adversely affect a trader’s position.

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