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Forex gurus will have you believe that they are making billions of the forex market because they are skillful; because they have the knowledge and skills to give them the edge over the other traders.
So it is the common belief - whether consciously or not -that good traders use their skills to gain profit... and if they make losing trades... it's not because their skills were lacking, and not because their systems were wrong, but because they were unlucky.
I think the opposite is true. When I make a profit from my trades, I consider myself lucky. And whenever I make a loss or exit a position with losses, it is then that I employ my skills. There are several reasons why I say this.
The first is that I don't really have a "system". Perhaps this is mainly because I'm not that much of a technical trader, but then again I don't always lean in the complete fundamental theories that witnesses of recent months would be happy to debunk. But I always believe that I should open a position with my own reason: whether it is technical or fundamental; whether it is based on the opinions of a few or the majority...
And when you look out there, you can safely say that traders are divided quite evenly over the direction of any one pair of currencies. Basically speaking (though don't take this as a mathematical fact), this to me means that at any one time anyone can enter any position anmd have a 50-50 chance of making money (one might argue that a trader actually enters a loss as soon as he opens, because he has to pay the spread or commission to his broker).
If the trade goes into positive, and I make some profit... then I consider myself lucky. So what if my prediction came true, or my system proved right, or my analysis was correct? Many times especially in modern forex, the market has swung in directions that have defied theory and experience. So in the end, if I end up profiting from a trade, then I am lucky.
So when does a trader employ his forex skills? I believe your trading skills and know-how come in most importantly when cutting losses. Traders before anything else, must know how to protect themselves from exposure, from risk.As traders we never, ever, EVER can know what lies ahead. We don't know what will happen the next month, week, day, hour, even minute. We only know the past, what has happened. Therefore, mitigating risk - knowing when to cut your losses - is the only way a trader can ensure that he remains alive to trade again tomorrow, next week, next month, next year.
And, therefore, I say that profits are always a matter of luck, but losses are a decision of skill.
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