Risk Management

1. What Is Risk Management? Risk management refers to the process of identifying potential losses before entering a trade, evaluating the size of that risk, and applying predefined rules to protect trading capital. Losses are a normal outcome of trading. The objective…

1. Why Risk Management Matters Financial markets offer significant opportunities, but they also involve substantial risk. Losses are an inherent part of trading, and no strategy can completely eliminate them. For this reason, risk management is essential for protecting trading capital. Its…

1. Definition of a Stop-Loss A stop-loss is an automatic order that closes a trade if the market moves against the position. Its primary purpose is to protect trading capital and manage risk. Every trade should have three predefined points: Entry point…

1. Trading a Fixed Position Size In this approach, the same number of lots is traded for every position, regardless of account size or stop-loss distance. For example: Trading 1 lot per trade, whether the account balance is $1,000 or $50,000, with…

1. Introduction In financial markets, nearly every trade involves uncertainty. While price movements can create opportunity, they also introduce risk. Determining whether a trade is worth taking requires more than intuition or experience, objective and repeatable metrics are essential. One of the…

1. Stocks — Familiar and Beginner-Friendly Stocks are among the oldest and most widely traded financial instruments. Purchasing a stock represents ownership in a publicly listed company. Advantages High liquidity in major companies such as Microsoft, Meta, and Nvidia. Moderate volatility compared…