Good risk management is one of the cornerstones of algorithmic trading. Bad risk management practices can turn potential profitable strategies into non-profitable ones. There is an even bigger risk of violating rules and regulations at trading exchanges that can often lead to legal actions and huge penalties. Finally, one of the biggest risks with high-speed automated algorithmic trading is that poorly programmed computer software is prone to bugs and errors. There are many instances of entire firms shutting down due to automated high-speed algorithmic trading systems that run amok. Hence, risk management systems need to be built to be extremely robust, feature rich, and have multiple layers of redundancy. There also needs to be a very high level of testing, stress testing, and strict change management to minimize the possibility of risk systems failing. In Chapter 6, Managing the Risk of Algorithmic Strategies, of this book, we will have an entire section dedicated to best risk management practices so as to maximize the profitability of trading strategies as well as avoid common pitfalls resulting in losses or bankruptcy.