How to double your money in forex trading?

“How to double your money?” — A reverberating question, haunting desire and an uphill task for many. But, is it greed? Certainly not. ‘Making your money work for you’ or ‘Earning while you’re sleeping’, as the investors say, is a smart way to make money. And, given a chance, who wouldn’t do it?

In forex trading, doubling your money is seemingly possible than in any other avenue. Thanks to modern-day forex brokers, as well, for providing 1:500 leverage, which calls for a minimum capital requirement.

Here are a few safe ways to double your money. However, we wish to warn you that these are just the ways which have worked in the past. Although, there is a good chance for the history to repeat, there are no guarantees. So, your destiny is in your hands.

The Simplest way to double your money

It is the long haul. You have to wait for years to see your money double this way, but the kicker is you don’t need to follow charts or learn complicated techniques.

Open a savings account in the currency which bears higher interest rate. As the rate of interest accumulates steadily and the power of compound interest kicks in, you see your money double in a few years.

Rule of 72

The rule of 72 will help you ascertain the number of years required to double your money.

Divide the value of 72 with the expected annual rate of return. The result is the number of years required to double your money.

Pitfall

The tricky part here is that higher interest rate currencies usually have high inflation rates. So, it will depreciate the value of the currency as well.

Hence, if you choose a major currency with a solid interest rate, you are bound to succeed.

However, if you are a US citizen, the savings account method will not be a wise choice. Since the US dollar pares down the gain in interest rate by appreciating in value against your currency over the course of time.

On the contrary, if you are a non-US citizen, then opening a savings account in the States would be a smart choice. You can have a double bonanza. The interest rates at the US are close to zero and are projected to skew north in the coming years. Also, the value of the US dollar is resilient in tough times and usually appreciates in the due course.

Though the process of opening a savings account in the US has become tedious off-late, it is certainly worth the effort.

The Classic Way to double your money

It is the age-old method of investment and mastered by many in the stock market.

Buying a stock without margin and leverage and holding it for the long-term.

The same strategy can be applied in the forex market with lower risk.

Buy a currency pair in low quantity and hold it for the long-term. Or one can trade currencies positionally with a slightly long-term perspective.

If a risk-reward ratio of 1:2 is deployed, you’re bound to double your money in 35 trades, assuming you don’t have drawdowns or losses.

Doubling your money with 1:2 risk-reward ratio

Opening Balance 1000 Trade 18 1428
Trade 1 1020 Trade 19 1457
Trade 2 1040 Trade 20 1486
Trade 3 1061 Trade 21 1516
Trade 4 1082 Trade 22 1546
Trade 5 1104 Trade 23 1577
Trade 6 1126 Trade 24 1608
Trade 7 1149 Trade 25 1641
Trade 8 1172 Trade 26 1673
Trade 9 1195 Trade 27 1707
Trade 10 1219 Trade 28 1741
Trade 11 1243 Trade 29 1776
Trade 12 1268 Trade 30 1811
Trade 13 1294 Trade 31 1848
Trade 14 1319 Trade 32 1885
Trade 15 1346 Trade 33 1922
Trade 16 1373 Trade 34 1961
Trade 17 1400 Trade 35 2000

Advantage

The long-term and positional trend of the currencies don’t alter its course often.

So, once you identify the course of the market and buy or sell only on pullbacks, the process becomes easy.

Pitfall

The ratio of 1:2 is just indicative and is subject to change depending on your risk appetite and knowledge in the forex market.

Also, the success rate of the methodology depends on the strategy as it is subject to accuracy.

The Speculative Way

The speculative way is nothing but short-term trading or scalping.

What seems a noise to a long-term trader, seems meaningful to a speculator.

It is the riskiest approach of the lot since it depends on short-term price fluctuations which is difficult to interpret even for an experienced hand.

The approach is similar to the classic way. You have to choose a risk-reward ratio that suits your appetite and style.

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The only difference being the frequency of trading activity. You take a high number of trades in quick succession and close down the cycle of 35 trades (assuming, you choose 1:2 ratio) in just a week or month.

But can you hit the mark in all the 35 trades?

The Best Way to double your money

Getting it right for 35 consecutive trades is certainly a Himalayan task, even for an expert. So, instead of replacing one problem with another, why not we take a hit at it directly. Because there is an easy way around.

Conclusion

It is certainly possible to double your money in forex trading. But it becomes probable only with a good strategy. The strategy which we have highlighted here is the use of an indicator, Pipbreaker. But, there are other avenues as well. If you’re adept with technical analysis, you can give it a shot with your own strategy. Else, take a helping hand and there is no harm.

#double #money #forex #trading

“If you don't find a way to make money while you sleep, you will work until you die.”

- Warren Buffett

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