There are many risk management strategies and tools that you can use in Forex trading.
Two of the most used are the stop loss order and using effective leverage. Stop losses can be directly set in the MT4 platform, allowing traders to determine their risk appetite to avoid excessive losses.
Leverage refers to the ratio of position size and funds in your account. If the total trading capital is $10,000 and the trading position is $100,000 the effective leverage is 1:10.
In some cases, many inexperienced traders tend to set their leverage at very high ratios which can expose them to potentially large losses.
By reducing the effective leverage, traders can introduce a level of risk management and control in their trading.