How to Consistently Grow Small Forex Account
If you are new to the world of forex trading, then you are probably having some trouble making money. The fact of the matter is that many of us start out with just a few hundred dollars. Of course, starting out with such little money is not easy. Being able to grow a small forex account consistently, into something worthwhile, is much easier said than done.
It takes a lot of skill, dedication, and common sense in order to grow a small forex account into something substantial. With that being said, it is more than possible to start out with a very limited amount of money, and still grow that small forex account into something that you can be proud of. It’s not easy, but it is doable. Let’s now go over Andrew’s biggest tips on growing a small Forex trading account consistently yet quickly.
How to Grow a Small Forex Account
What we want to do right now is to go over the most important tips on how to grow a small forex account in a consistent manner. Some of these tips may seem pretty obvious, but all too many beginners don’t follow them or know about them. We are here to help you grow a small forex account consistently, and this means starting with the basics.
Trading Strong Trends
When it comes to growing a small forex account consistently, one of the biggest tips you need to follow is to only trade strong trends. One of the biggest mistakes that newbie traders make is to trade with very weak trends, in ranging markets, or even against trends.
Yes, it is possible to trade in ranging markets or against trends, but these are things that even professional traders often have trouble with period they professional traders can’t do these things with great success, the new as a newbie surely can’t either. The most consistent way to success here is to look for extremely strong trends, and only trade when those trends are going to continue.
Remember Risk Management
If you want to grow a small forex account consistently, then you definitely also need to keep risk management in mind. For one, this means that you should never invest more than 3% of your total trading capital into a single trade.
This way, if a trade does go South, at least you won’t lose more than 3% of your total capital. All too many movies invest ridiculous portions of their total capital into trades. When those trades are lost, those new traders lose all of their money. What you also need to remember here is that you want to start very small.
For the first week, start with 0.01 lots per trade. Only increase the amount of lots per trade that you invest if you are profitable. As a rule of thumb, you should never invest more than 0.30 lots per trade.
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Lock in Those Profits
What all too many newbies fail to do when attempting to grow a small forex account is to lock in their profits at a reasonable time.
Sure, tripling or even quadrupling your initial investment is fantastic. However, it’s getting there that is the problem period all too many newbies will end up losing money because their winning trades aren’t winning enough for them.
The point here is that you’re not supposed to get greedy. As a total newbie, a 1.5 profit margin is more than enough. In other words, your risk to reward ratio should not be all too high. If you have already made a 50% gain on your trade, as a newbie, it’s wise to close the trade and to lock in those profits.
Fundamental Calendars
What you definitely need to do before you start trading on any given day is to check your fundamental calendars for news. Here, you are looking for three bull news.
If you see that any currencies have three bull news listed, then you want to avoid trading with them. Never trade with a specific currency when there is fundamental three bull or three start news. It’s simply not worth the risk.
Don’t Over-Leverage Trades
Another mistake that ultimately newbies make is to over leverage their trades. Sure you can leverage a trade by 500 to one, but if your trade is lost, you end up losing 500 times your initial investment. The fact of the matter is that as a newbie, you need to leverage trades only by a small amount, or not at all.
Leveraging trades is a great way to make money if you have limited capital to invest with come up but it’s also a great way to lose much more money than you can afford to lose in the first place. For the first few weeks, you really want to stay away from leveraging your trades.
Don’t Use Just One Timeframe
To grow a small forex account consistently, you should also use many different timeframes in order to find your entry points into trades.
You should use 15 minute, one hour, 4 hour, and one day timeframes in order to find the best entries. You can see things on longer timeframes that you can’t see on shorter timeframes, and vice versa. You want to be confident that you are entering a good trade before you enter it.
Don’t Overtrade to Make Up For Losses
One of the best ways to blow your trading account is to start over trading when you have losses to account for.
The simple reality is that you will lose money at some points. However, starting to trade at very high levels and with high investments amounts to try to make up for those losses is not going to get you anywhere.
This will lead to a gambling mindset and two emotional trading. If you start over trading to make up for losses, rather than growing a small trading account, you are more likely to just lose more money.
Consistency is Key
The other thing to remember here is that consistency in trading is always key period if you want to grow a small trading account, you need to stay consistent in your approach. If you have a good trading method or strategy that is proven to work, then stay with it.
If you do lose some trades, just analyzed what went wrong, and then make small adjustments from there. Flip flopping from one trading strategy to another without mastering any one strategy is not going to get you anywhere.
Growing A Small Forex Account Consistently
If you follow the tips that we have provided you with here today, you should be able to grow a small forex account consistently.
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