Glossary · from the DESK dictionary
Risk Management
The systematic process of identifying, assessing and controlling financial risks in order to limit losses and optimize a portfolio's risk-reward ratio.
In plain words
Covers techniques such as diversification, hedging, position sizing and stop-loss orders.
What it means for traders
A central practical concept for every investor and trader.
Common pitfalls
No risk management system can eliminate losses entirely; it can only limit them.
Related terms
Money Management · Risk · Risk Class
From the DESK dictionary. For information only, not investment advice.
This is one page of many.
- The DESK dictionary explains more than 9,400 market terms like this one, in English and German – searchable, sorted by topic and difficulty, with favourites.
- Plus the Macro Terminal with more than 900 indicators per country, company pages and a weekly report.
Also open to read: Glossary A–Z · Free calculators · Weekly report archive
DESK is a research tool and not investment advice. Page generated: 2026-10-12.