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Risk management: definition and meaning

Risk management is the set of rules you follow to limit losses, such as position sizing, stop-losses and diversification.

Why it matters

Surviving bad trades matters more than finding perfect ones.

Related terms

• Stop-loss
  A stop-loss is an order that closes a position automatically if the price reaches a level …
• Drawdown
  A drawdown is the fall from a peak value to a later low.…

Guides that explain more

• Spot vs Futures Trading: What's the Difference?
• Crypto Risk Management for Beginners
• Bitcoin vs Ethereum: Key Differences Explained

Educational content only, not financial advice.