How to do risk management in trading ?

Five Steps of the Risk Management Process 2025
Risk Management Process. ...
Here Are The Five Essential Steps of A Risk Management Process. ...
Step 1: Identify the Risk. ...
Step 2: Analyze the Risk. ...
Step 3: Evaluate the Risk or Risk Assessment. ...
Step 4: Treat the Risk. ...
Step 5: Monitor and Review the Risk.

One popular method is the 2% Rule, which means you never put more than 2% of your account equity at risk (Table 1). For example, if you are trading a $50,000 account, and you choose a risk management stop loss of 2%, you could risk up to $1,000 on any given trade.