Sometimes you may hear questions like “Is success in trading achieved due to trading methods or to psychological aspects?” Definitely the right answer is that both things are necessary components and the point where these two spheres are crossed is called risk management. It determines ahead to some extent either successful result or a defeat. Though all traders would like to make money out of the majority of their transactions, in real trading it appears to be that only a small part of all deals may bring high profit, and these few successful deals provide beneficial correlation between profit and losses. For example if 10 percent of transactions bring major part of profit this means that other 90 percent should be eliminated in time. The key ability in trading is to figure out whether the current trade is mistaken before it breaks correlation between profit and losses.

Very often many good traders were seen to exit from trades when trend could still continue following the right direction, while bad traders exit when they find out that market has changed its direction into worse. However, if 10 percent of transactions bring the major part of the profit, traders need to be ready to gain maximum profit out of good deals.

This means not only to find an appropriate moment when you may reduce your losses helping your profit rise, it also means to carry out trades increasing profit of a good deal. Successful traders are capable to define the perfect moment for starting trade, they are also very patient in anticipation. They use the highest lot for a position to get a complete benefit out of a successful trade. That is why profit of 10 deliberate good trades covers the losses of 90 bad trades ended with losses.

The period of holding a position always means much. Unlucky traders are often seen to carry out trades with long period of holding, but these trades appear to be not successful. Some traders tend to hold a long position during an extremely long period of time, having right for doing that. However, such traders may keep on following the price actions in the period of high market volatility as long as trend moves in right direction as nothing gives signals that they have determined a wrong bottom. And finally such a position may result into a monthly profit.

This statement is true not only for the currency market but to our everyday life. The same position may bring success in career and business. Successful people may start a dozen of projects during a month, however, concentrating on a single one, which seems to bring the best results. A company may launch ten new modifications of an item and immediately to stop producing nine of them, making money out of a single one which is accepted by the market. The same conclusion concerns prominent artists and inventors. They tend to spend their efforts on different works, gaining wide popularity due to a few masterpieces drawing public attention.

Successful traders manage risk that they are exposed to in the market as well as successful people manage the risk that they are exposed to in real life. This implies different attempts taken in our life as well as all eliminated attempts. This process determines our capacity to get benefit out of promising situations that we encounter anywhere.

Author's Bio: 

Dennis Vydrin of Forex Ltd. is an experienced expert in Forex trading. Please visit