We all have a goal when it comes to our trading account.
Maybe you have a big number in your head that you are working towards. Perhaps you simply want to build from something small.
Whatever it is, growing your account in an efficient and fast way is something we all would love.
Although there isn’t a single, magical method to boost your trading account to the stars, there are several areas worth paying attention to. All of them make account growth much quicker and much more efficient.
These are some of the best lessons I have learnt throughout the growth of my own account and have helped me to achieve my financial goals in only a few years.
So let’s take a look at where you can take action to grow your forex account quicker!
I am not going to beat around the bush with this article – your RR is perhaps the single most important part of growing your account in a fast and efficient way.
Your RR is the ratio between your target and your stop loss. I recommend a minimum RR of 1.5.
If a potential setup gives you a 1.3RR then it does not qualify for a trade entry. Simple as that.
Your minimum may be different; a lot of my students use 2RR as a minimum. However, I suggest you go no lower than 1.5RR
Why? Well, if you use 1 as a minimum RR that means overall you must be above a 50% win rate in order to be a profitable trader.
Now, with a 1.5RR minimum you need to have a win rate of over 40% in order to be profitable.
That extra 10% is a big deal.
For every 3 losses, you need only win 2 trades in order to cover those lost trades. This helps in one area that many traders fall into: chasing losses.
There is less pressure on your mindset to “win at all costs” and this will allow you to trade at a higher level.
Efficient trading is about being a profitable trader, not a winning trader.
Trading is about protecting your capital and with a minimum RR that you stick to, you will find your account growing much faster than if you did not.
When it comes to forex trading the amount of capital you can trade with has a significant impact on your profits and growth.
The more capital you have, the bigger the return you see per trade. This is because your return is a % of your account size.
So larger amounts of capital generates more capital. It’s how the rich can seemingly get richer so easily whilst the poor struggle to break through the ceiling.
Let’s say your account size is $1,000. With a return of 5% per trade, you are making $50 per win. With a $100,000 account your 5% return jumps up to $5,000.
So to grow your account quickly and efficiently you will have a much easier time if you are able to add funding to it. There are some pitfalls here though.
If you are a new trader you MUST start small when live trading. The psychological impact would be too big if you immediately started trading with all of your savings.
Instead, we recommend adding capital to your account every month. It can be a small amount, but with time this will allow you to see bigger returns and grow at a faster pace.
Think of a pension scheme. You add a small amount into your pension every month. You can treat your live forex trading account the same!
Trade Multiple Time Frames
You may be surprised to see “use multiple time frames” in this list at first glance, but in reality it is downright essential.
Look, we all have our preference on how to trade, what setups we prefer, what time frames we are comfortable on. But as price action traders one of our biggest strengths is our flexibility.
Not relying on indicators allows you to go to any time frame, read price action, and understand what price’s story is telling you.
Trading on multiple time frames is something that you should do if you are interested in growing your account quickly.
Take your time though – if you are new to trading then you need to learn to crawl and walk before you can run.
Why I am encouraging you to do this is for the simple reason that you will find more trade setups. Think about it – if you traded only one time frame on a pair then you are only looking at a fraction of what price action is showing you.
Learning to trade on large and small time frames will open up so many opportunities for you that you will have to start filtering great trades from good trades.
Even if you are uncertain, you should at least start checking other time frames. There is a reason why I still use a demo account every so often. It allows me to test and refine my strategy on other time frames.
If you do the same, you are opening yourself up to more trading opportunities. Take this current slow market as an example!
So many pairs are moving sideways on the large time frames. Instead of saying “No trades today, oh well”, go to the lower time frames and you will often find some exciting price action. Just take a look at the example below!
Now I know I just told you to look for more trading opportunities. However, there are pitfalls that traders fall into when I tell them to look for more trades and that is the issue of overtrading.
Remember when I said you would have to start sorting through great and good trades? I meant that.
You shouldn’t be taking every single potential trade that you come across. Not least for the reason of needing to have a maximum account exposure, but also because some are simply better than others.
If you overtrade you will stunt the growth of your account. We want the growth to be fast, yes, but we also need it to be efficient.
Overtrading reduces your efficiency by a significant amount if left unchecked. So in regards to our offensive and defensive approach, the first two points are offensive and this point is about your defense.
This is linked with Fear of Missing Out (FOMO) and a lot of traders struggle with it.
Accept that you will miss trades, accept that not every trade is going to net you a win.
But more importantly, work on your price action analysis skill set so that you can pick the best trade from a bunch.
Last but not least, be consistent with your trading.
So many traders fall out of trading because they give up mentally and start to check their charts less and less.
Consistency is key to growing your account.
Account growth doesn’t happen from big wins and huge jumps forward. It happens from the everyday small decisions.
These accumulate to create a consistent level of progress and less of a chance for a large setback to occur.
Even if it is as small as checking your charts once a day just to stay up to date with major pairs, do it.
Growth comes with consistent time spent on your charts. It doesn’t even have to be that much per day – there’s only so much analysis you can do!
But what counts is the continuous progression. This is the glue that allows you to succeed with account growth because you stay informed and remain relevant with the current market.
#Quickly #Grow #Forex #Trading #Account #Forex4noobs
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