What is risk management in trading?

What Is Risk Management in Trading?

Risk management means controlling how much you can lose per trade and overall. Rules include: risk only a small percentage of your capital per trade (e.g. 1% to 2%), use stop losses so you exit when wrong, and avoid putting all capital in one trade or one coin. Do not add to losing positions without a plan. Diversification across assets can smooth returns. In crypto, volatility is high, so position sizing and stops are critical. Good risk management does not guarantee profit but helps you survive long enough to improve.