Risk management in trading involves strategies to minimize potential losses and protect capital. Key aspects:

1. Position sizing: controlling trade size

2. Stop-loss orders: automatic exit points

3. Risk-reward ratio: balancing potential gains and losses

4. Diversification: spreading risk across assets

5. Hedging: reducing risk with opposing positions

Effective risk management helps traders:

1. Limit losses

2. Maximize gains

3. Maintain emotional control

4. Stay consistent

Some popular risk management tools:

1. Stop-loss orders

2. Take-profit orders

3. Trailing stops

4. Risk management software

What's your approach to risk management?