How do you make money on Uniswap?

I'm curious about the mechanics of earning profits on Uniswap. Could you please explain how traders can generate income on this decentralized exchange? I've heard about providing liquidity pools, but I'm not entirely sure how it works. Does it involve buying and selling tokens at favorable prices? Or is there another strategy involved? I'm also interested in understanding the risks associated with trading on Uniswap. Could you elaborate on potential losses and how traders can mitigate them? I'm eager to learn more about this exciting aspect of cryptocurrency finance.