Forex risk management, often referred to as risk management forex, is the strategic approach traders use to protect their investments in the highly volatile foreign exchange market. This practice involves identifying, analyzing, and mitigating the risks associated with forex trading to preserve capital and avoid significant losses. Key strategies include setting stop-loss and take-profit orders, which help control potential losses or lock in profits; managing position sizes to prevent over-leveraging; and diversifying currency pairs to reduce exposure to a single asset. Traders may also implement a risk-to-reward ratio, typically aiming for a positive balance between potential gains and acceptable losses. Effective risk management forex helps traders make more informed decisions, stay disciplined, and enhance their long-term profitability.