Risk management is the work of balancing opportunities for gains with the potential of making losses from your investing choices. This work can help reduce potential losses and increase potential gains. It can also help protect traders' accounts from losing all of their money. The risk of losing money occurs when traders open positions. The larger the positions, the greater the risk, but also the greater opportunity for profit.

Risk management is an essential but often overlooked prerequisite to successful active trading. After all, a trader who has generated substantial profits can lose it all in just one or two bad trades without a proper risk management strategy. So how do you develop the best techniques to curb the risks of the market?

This article will discuss some simple strategies that can be used to protect your trading profits.