Those who embarked on the trading path having a small trading account, wonder how to quickly grow Forex account. The larger the initial capital, the more money you can make even if profitability is relatively low and you use the conservative trading strategy with minimum risks. That being said, not everyone can afford a large core capital. However, the good news is that there are ways to quickly increase the trading account.
It stands to mention that it is a risky affair since you can lose the entire deposit if you choose the wrong approach. That being said, it is still possible to grow forex account safely and quickly. Below we are going to cover the common mistakes made by the newbies. You will also learn the rules and get the relevant tips you can use as a guide to increasing the trading account.
1. Mistake 1: No Strategy, Trading Plan or System
2. Mistake 2: Unreasonably High Risks
3. Mistake 3: Inability to control your emotions
Mistake 1: No Strategy, Trading Plan or System
You've probably already heard these three terms often mentioned by experienced traders. One could get the impression that the strategy is everything when it comes to trading. And it is rightly so.
The thing is, chaotic trades are a recipe for deposit loss, yet all newbies still make this mistake all too often. When growing the account, you should always take your time. The key to rapid profit growth lies in precise entries.
If you wish to grow Forex account, the strategy is a must-have element. Second of all, it must be clear to you and have a high mathematical expectation. The entry rules can be very simple e.g. in the case of a support and resistance trading strategy. However, it is important that you know how to read the market signals correctly and understand when to enter and exit.
Mistake 2: Unreasonably High Risks
Those who are interested in growing Forex account quickly often get tempted to bet everything they have. Newbies that do not have much money in their trading account still rush to enter positions with a big lot and inevitably lose half of the deposit at the very first stop-loss. There will be even less money left to get back on track.
Ignoring and not managing risks or increasing them unreasonably is a sure way to send your money down the drain instead of letting them grow. “Don’t rush”, as the ancient wisdom suggests.
So, how do you grow the Forex account while keeping risks down to a minimum?
1. Always place a stop loss when trading.
2. The risk/reward ratio should be at least 1:3. Look for trades with a higher ratio e.g. near key support and resistance levels, in case of the bounce from historical highs or lows. In that case, the potential can exceed 1:10. This type of position will boost profits.
3. Based on the mathematical expectation of your strategy, determine the allowable risk per trade. Is it 5% or 10%? Set out the maximum risk threshold and make sure not to exceed it.
4. Don’t forget the leverage risks! Factor in the size of the leverage when making calculations.
5. Set realistic goals as far as your profits go. You may not be able to double your Forex account every week. However, by achieving, let’s say, 5% per week, you can increase the initial amount by 1,000% in 48 times.
Mistake 3: Inability to control your emotions
Trading psychology and the ability to manage your emotions constitute 80% of success. When trying to grow a trading account quickly, aside from regular pressure traders deal with, there is also the urgency factor.
Regardless of strategies and methods you use to grow Forex account, below are some tips on how to do it while preserving the peace of mind and avoiding additional stress and losses.
1. Repeat like a mantra, “Don’t rush!” This is the key rule when growing a trading account. It’s better to make one or two trades per week with an accurate entry and a 1:10 profit potential rather than a dozen impulsive trades most of which will end up being unprofitable.
2. The smaller the account and the bigger the goals, the less often you can afford to be wrong. So, make sure to check everything: the trading strategy before applying it, the accuracy of the entry point, the position size, the likelihood of getting kicked out by stop-loss order, etc.
3. Find a way to unwind and don’t make attempts of growing Forex account unless you are calm and rational.
4. If the size of your account allows, install the Risk Manager solution brought to you by Gerchik & Co. This will help reduce the human factor and risks.
What to know:
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