Why Is Risk Management Important?
Risk management is the most important topics about trading. Why is it
important? Well, trading is a business of making money, and to make money
you have to learn how to manage your capital and your potential losses.
This is one of the most neglected areas in trading. Many traders are anxious
to get right into trading without choosing the right lot size for their positions.
When you trade without a risk management plan, you are actually gambling.
You are not looking at the long-term return on your investment. Instead, you
are only looking for that "winning lottery ticket."
You can have the best trading system in the world, and still lose all your
money in the market. Risk management will protect your capital from
unnecessary losses and make your account profitable in the long run.