What Is Risk Management?
The set of rules that keeps you solvent: risking a small fixed percentage per trade, using stop losses, limiting open exposure and avoiding revenge trading. Most traders who fail with leverage fail at risk management, not at market analysis.
Related Terms
- Position Size The total notional value of your trade, calculated as margin multiplied by leverage.
- Stop Loss An order that automatically closes your position at a predefined price to cap your loss.
- Drawdown The decline from an account's peak value to its lowest subsequent point, expressed as a percentage.
Where You Will Meet This Term
You will run into risk management constantly on any futures exchange, from the order panel to the position dashboard. If you are still building your foundation, our guides on leverage, liquidation and risk management connect the vocabulary into an actual trading process, and the full glossary covers every other term you will encounter.