I understand risk management in trading in investment banking to be tracking a trader's profit and loss and checking they don't go outside their parameters of risk. Can somebody explain risk management to me a bit more clearly as I am a bit muddled. Thank you.
This is a huge field and entire books have been written about it. If you are interested in risk management from an institutional perspective, you should read "Dynamic Hedging" by Taleb, or something similar. There is a new edition of this book coming out in a couple months so you may want to wait.