What is Risk Management?

Risk management in trading involves identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events. Effective risk management is vital for preserving capital and ensuring long-term success.

Key Strategies

Some common risk management strategies include setting stop-loss orders, diversifying investments, and using position sizing to control exposure. By implementing these strategies, traders can protect themselves from significant losses.