In Forex Trading, Without Effective Risk Management, You Risk Huge Losses and the Complete Depletion of Your Account. The Forex market is highly volatile, with various factors influencing currency fluctuations. Even experienced traders, without effective risk management, will struggle to turn their profits into tangible gains. One of the most important actions in risk management is setting stop-loss orders. Let's say you're a Forex trader deciding to trade EUR/USD. You analyze and predict the euro might rise, so you decide to go long (buy). Your target price is 1.1000, but you're concerned the market might experience a brief pullback. Therefore, you set a stop-loss at 1.0950, meaning if the market drops to 1.0950, your position will automatically close to prevent further losses.