Risk is there in every business and proper risk management is road to success for any business. Equity trading is a lucrative business which is very rewarding but this reward is not risk free, as theoretically and practically risk free trade does not exist. Because risk is associated with the reward, it becomes essential to manage risk in order to protect one’s capital.

Risk management is very essential for trading as markets have potential to take back all life time profits in just few bad trades. Risk managements help in preserving initial capital and accumulated profits so that one can stay alive long enough in financial markets for wealth creation, thus it provides biggest edge in trading.