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Risk

Risk management — definition & meaning

The rules and habits that control how much you can lose.

Risk management is the whole set of habits — stops, position sizing, limits and discipline — that keep losses small enough to survive.

Most traders fail not from bad entries but from poor risk control: risking too much, no stop, or revenge trading after a loss. Protecting capital comes before chasing profit.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Stop-loss
A preset order that closes a losing trade to cap your loss.
Position sizing
Choosing how large a trade to place based on your risk per trade.
Drawdown
The drop from a peak to a trough in your account value.
Risk-reward ratio
How much you stand to gain compared with what you risk on a trade.
Leverage
Borrowed exposure that lets you control a large position with a small deposit.
Margin
The deposit a broker holds to keep a leveraged position open.

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