Most people ignore it. Some use mental 'stop-loss' orders or place real ones with their brokers. Such orders are usually better than using nothing but are subjective and arbitrary and often disappointing.
There are three other ways to handle risk. Avoid it entirely by not owning stocks or funds. Use some single, market signal that is specifically based on the market itself that will tell you when to get out. Use a stock-pricing system that specifically relates each of your stocks to other stocks or to the market.
These are objective and market based. The market is telling you when to act and not you telling the market. The market cannot hear you. But you can listen to the market.
The system in these pages combines all three ways mentioned in the second paragraph above. Either the single-market signal or the stock-pricing mechanism will take you all the way out.
How? I'll get to that in just a moment, but first I want to address verification and long-term validation.