Trading is not a game of chance and winning at trading is not at all a matter of luck. Trading instead is a profession and winning at trading requires well defined strategies and their proper execution. Anyone trading in the markets without proper strategies is only welcoming his own doom.
Talking about strategies, each and every trade requires a set of several strategies to work together in tandem to make you earn money. While there are many strategies, one of the most important strategies that most traders overlook is risk management.
Most traders who are sincere spend years to understand the markets but they forget that trading by nature is a very risky thing. You cannot totally eliminate the risk out of a trade no matter how deeply you understand the markets. Forex moves may at times be totally random and can go against all strategy based predictions. At such times the only strategy that can save you is risk management.
While other strategies include predicting market moves along with determining entry and exit points at correct times to earn maximum profit, risk management strategies involve saving you from erratic market moves that cannot be predicted. Your understanding of the market helps you earn profit, and risk management helps you avoid losses when the market is not in a good mood or when you predicted it wrong.
All successful traders understand the importance of risk management and never trade without it. And that’s what makes them successful in the first place. If you want to be one of them, have a proper plan in place for every possibility of a trade, execute it properly without getting into emotions and see the magic or trading working for you!