Every foreign exchange trader goes down the same path. It can be divided into 4 steps:
- The trader incurs losses and tries to keep at least his deposit.
- Amount of profits and losses goes equal. The trader breaks even.
- Trading starts to bring consistent profits.
- The trader finds ways to increase profits.
Today we will focus on the last step and look at ways to increase your earnings.
1. Trade Larger Volumes
The larger your trade, the higher your return can be. There are several ways to increase trading volumes:
- Do not withdraw the profit you have already made. With every successful trade, your balance grows. The resulting profit can also be put into circulation. The main thing is to adhere to the maximum risk level for each trading position. This way you can get more return for the same level of risk.
- Deposit free money into your account. If you managed to save or earn extra, you can put that money into circulation and make it work for you.
- Increase leverage size. Here you need to be careful as the risks grow with the growth of the leverage. Don't make hasty decisions even if you are making a steady profit. Don't increase your leverage size more than twofold at a time.
2. Enter the Right Moment
You will get the maximum profit if you enter a trade at the very end of a correction or at the time of a trend reversal. If you open a position in the middle of the trend, then the return will be much lower. The market will tell you when it is ready for a turn:
- Reversal candlestick patterns
- Reversal figures
- Changes in buy or sell volumes, etc.
3. Don’t Exit Too Early
Inexperienced traders lose a huge chunk of their profits when exiting too early. Even the smallest correction on the chart scares them. At the first price movement against them, novice traders are in a hurry to protect the gained profit and close the position. Allowing a trade to fully work itself out is the best way to increase your profits.
The more you trade, the better you will feel the market. You will know when the market is ready to reverse or is just correcting. Trust your instinct and get the most out of your trades.
4. Changing Stop Loss levels
Traders try to minimize their losses with a narrow Stop Loss. However, this often leads to an increase in unsuccessful trades. Tight Stop Loss doesn’t allow the trade to “breathe”. Even with a minimal correction, trades are closed at a loss, right before the market reverses in the direction you need.
This is especially true for high volatility markets. Since 2020, the currency market has entered a similar phase. So, for profit growth, try to widen your Stop Loss levels. This will slightly increase your risks. However, the total return on trades will cover them with interest.
Remember that you should increase your trading risks only if you already feel confident as a trader and get a small but stable profit. If these words are about you, then make sure to use tips from this article and Forex trading will become more profitable and much more enjoyable.