Trading carries inherent risks, and it is not inherently “safe.” Markets can move quickly, leverage can amplify losses, and inexperienced traders often underestimate volatility. Safe trading depends on your strategy, risk management, and understanding of the products you trade.

Common trading risks include market volatility, leverage amplifying losses, slippage, liquidity issues, emotional decision-making, and overexposure. Each of these can lead to significant losses if not managed properly.

Most traders lose money due to poor risk management, over-leveraging, emotional trading, lack of a structured plan, or misunderstanding how markets move. Many also trade without consistent discipline or adequate education.

You can manage risk by using stop-loss orders, controlling position size, avoiding over-leverage, setting clear risk-to-reward ratios, and sticking to a trading plan. Consistency and discipline are essential.

A stop-loss order automatically closes your trade when the market reaches a price you set, helping limit potential losses and protect your capital.

A take-profit order closes your trade when the market hits a predefined target price, allowing you to secure profits automatically.

A margin call occurs when your account equity drops below the required margin level, prompting you to deposit more funds or close positions to avoid liquidation.

A commonly recommended risk-to-reward ratio is 1:2 or higher, meaning you aim to make at least twice as much as you risk on each trade. The “best” ratio varies depending on strategy and market conditions.