It is important to have a clear risk / money management plan in mind for every trader.

Here is a quote by noted trading psychologist Van Tharp defining money management:

Money management is that portion of your trading
system that tells you “how many” or “how much.”
How many units of your investment should you put
on at a given time? How much risk should you be
willing to take? Aside from your personal
psychological issues, this is the most critical concept
you need to tackle as a trader or investor.

Remember this is a very crucial part of your survival as a trader.