#firstdealofthenewyearastylz Forex market volatility refers to the degree of price fluctuations in currency pairs over a specific period. It is influenced by factors such as economic data releases, geopolitical events, central bank policies, and market sentiment. Higher volatility means larger price swings, which can create both opportunities and risks for traders. Causes of Forex Market Volatility 1. Economic Data Releases – GDP, inflation rates, employment reports, and interest rate decisions can cause sharp price movements. 2. Geopolitical Events – Wars, elections, trade agreements, and global crises impact currency stability. 3. Liquidity Levels – Lower liquidity during off-market hours or holidays can lead to sudden price spikes. 4. Market Sentiment & Speculation – Traders' emotions, news, and institutional activities can drive volatility. 5. Central Bank Policies – Interest rate changes and monetary policy decisions significantly influence currency values. Understanding Loss in Forex Trading Losses occur when a trade moves against your position. They can be managed through risk management strategies such as: 1. Stop-Loss Orders – Automatically closes a trade at a predefined price to limit losses. 2. Proper Position Sizing – Risking only a small percentage of your capital per trade (e.g., 1-2%).