Individualists:

They tend to avoid extreme risk, do their own research, and act rationally.

Guardians:

They are typically older, more careful, and more risk averse.

Straight Arrows:

They fall in between other four personalities and are typically very balanced.

In speculation two things will be always around:

A. There will always be people willing to speculate and

B. History always repeats itself!

Speculation objects, rules and technological methods will always be changing. But, what has happened before will most likely happen again.

Whether it's tulip bulbs, precious metals, bonds, lottery tickets, ball games, or stocks, human nature is human nature. Ignorance, fear, greed and hope determine how people react and thus how prices move and markets behave.

People have speculated on almost everything at one time or another. Speculating, trading and investing on stock prices have become an essential part of our lives and economy. Trading is just another word for speculating, and investing is nothing more than speculating, except that it supposedly encompasses a longer time horizon and for some reasons it implies less risk.

Speculation and gambling are similar, with a few important differences. One major difference is that sometimes, successful speculators profit due to their skill, while gamblers prospect due to their luck.

Whether a trader, a speculator, or a gambler in all cases aim is to make a lot of money in a harry, and to be able to know when not to invest!

Yet, when most people start trading, only thing they think about is profit objective. Countless hours are spent on discovering how to buy and sell market with unwavering accuracy. Once they buy a market, amateur trader only thinks about how high is market going to go. Little effort is put into considering how low market could go, and where they should get out in order to control their losses.

These thoughts, which are so distant from minds of most traders, are what separate winners from losers.

Risk management is practice of determining what percentage of your account to risk for each and every trade in order to maximize expected profit potential of your trading strategy.

Once this amount is determined, this percentage must be translated into an absolute value and stop loss orders must be placed once a trade is entered in order to control potential losses at this value.

There is no guarantee that such efforts will control your losses, since market can gap in price beyond your stop loss order, resulting in losses greater than planned.