How to double your money — A reverberating question, a 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 more than in any other avenue. Also, thanks to modern forex brokers for giving 1:2000 leverage, which needs a minimum amount of capital.
Here are a few safe ways to double your money. However, we wish to warn you that these are just the ways that have worked in the past. Although there is a good chance for history to repeat itself, there are no guarantees. So, your destiny is in your hands.
The Simplest way to double your money
It is a long haul. You have to wait for years to see your money double this way, but the kicker is that you don’t need to follow charts or learn complicated techniques.
Open a savings account in a currency that bears a higher interest rate. Your money will double in a few years as the rate of interest steadily accumulates and the power of compound interest kicks in.
Rule of 72
The 72-year rule will help you determine the number of years required to double your money.
Divide the value of 72 by 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 rates by appreciating in value against your currency over time,
On the contrary, if you are a non-US citizen, opening a savings account in the United States would be a smart choice. You can have a double bonanza. Interest rates in 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 due course.
Though the process of opening a savings account in the US has become tedious of late, it is certainly worth the effort.
The Classic Way to double your money
It is the age-old method of investment and has been mastered by many in the stock market.
Buying a stock without margin or 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 trends of the currencies don’t alter their 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 of 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 like 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 are 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.
The only difference is the frequency of trading activity. You take a large number of trades in quick succession and close down the cycle of 35 trades (assuming you choose a 1:2 ratio) in just a week or month.
But can you hit the mark in all 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, rather than resolving one problem with another, why not attack it directly? because there is a simple alternative.
Conclusion
It is certainly possible to double your money in forex trading. But it becomes probable only with a good strategy. The strategy that 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, lend a helping hand; there is no harm.
“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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