“Why Risk Management Should Come Before Profit Expectations”

Trading decisions should begin with understanding risk rather than focusing only on the potential profit. Every market setup carries uncertainty, and even a well-planned trade can move in the opposite direction. The objective of risk management is therefore not to eliminate losses, but to keep an unfavorable outcome manageable. Before entering a trade, traders should understand where the trade idea becomes invalid, how much capital is being exposed, and whether the potential reward justifies the amount of risk being taken. Position sizing should also reflect the level of volatility and the trader's predefined risk limits. Consistent risk management becomes especially important during losing periods. Increasing position size to recover previous losses can create additional pressure and lead to emotional decisions. Similarly, taking trades without clearly defined risk can make it difficult to evaluate whether the original trading process is actually working. Learning: Profit is uncertain, but risk can be planned before entry. Protecting capital allows you to remain available for future opportunities. $SBIN