Every entrepreneur certainly has the desire to develop his business. The goal is of course so that he can get greater profits than what is currently obtained. Likewise with forex traders. Naturally, if a trader wants to develop his capital, so he can trade more freely.
The problem that arises later is that most seem to race to develop capital by conducting transactions "blindly". Instead of being able to develop capital, they are actually trapped in an overtrade trap, namely doing too many transactions without considering the power of capital so that it erodes the capital itself.
Then how can we develop capital in a (more) safe way?
* Prepare an Mature Strategy
Certainly. Without a mature strategy, it is very unlikely that you will succeed. I often say that a good trading strategy is not a strategy that can promise bombastic profit, but is consistent.
Little profit doesn't matter, as long as it's consistent. Occasional loss is reasonable. The most important thing is that the strategy can provide a consistent accumulation of profits for you. Consistent, that's the key word.
* A little bit later becomes a hill
In forex trading, there's nothing wrong with adhering to the principle of "gradually becoming a hill". Don't get hung up on the target, for example, you have to profit a percent per day or the like. Targets are indeed necessary, but the focus on the process is far more important.
Establish a progressive capital management strategy. Examples like the following.
Suppose you have a capital of $ 10,000. How do you make your capital (for example) $ 20,000? This means increasing 100%.
The fastest way of course is to add a deposit. But I'm sure you certainly already know that method. No need to discuss it again. What we will discuss below is how to strive to increase capital through trading.
* Patient and Diligent
One thing you need to realize is that forex trading requires patience. You must be patient and diligent in collecting pip by pip until your capital grows and develops. In the example above, it is stated that you want capital to grow by 100%, but this does not mean that it must be achieved on a daily basis.
For ordinary traders (I assume if you are not a beginner, you are an ordinary trader like me), the profit target does not need to be too big. Suppose you set the target profit per transaction is 5% of capital. That is, if your capital is $ 10,000, then your target profit per transaction is only $ 500. In forex, this target is quite realistic even for day trade.
If the profit target has been reached, immediately close your position. If necessary, apply the target by installing the Take Profit (TP) level. So, once the target is reached, your position will be automatically closed.
The biggest temptation is that you want to "get more". There is nothing wrong, but it must be realistic. Indeed, we are allowed to let profits go, but you should still pay attention to market conditions and conditions. If for example the price is fixed at support or resistance, consider closing your position even if for example the target has not been reached.
* Adjust Lot
If your capital increases, that means (with a good money management) your capital will get stronger. Well, there's nothing wrong with enlarging the position (lot) of trading if possible.
Example: with an initial capital of $ 10,000, in the trading plan you set your risk per transaction to only 5%. When new capital is $ 10,000, then each transaction you risk is $ 500.
At that time, suppose your analysis sees the technical risk limit (Stop Loss / SL) as 500 pips (5 decimal places). If 1 pip = $ 1, then 500 pips is equivalent to $ 500. Under these conditions, you can enter a position of 1 lot.
Well, when your capital has become $ 12,000 and the risk per transaction is still 5%, it means that the risk tolerance per your transaction is $ 600. If at that time you also see the technical limit of SL is 500 pips, then you may enter a position of 1.2 lots. So on.
This is called position sizing. With this technique you can increase your potential profits without increasing the risk. If the profit potential gradually becomes bigger, then your capital has the potential to grow faster.
Please you crave capital growth, but don't do it blindly. Do it gradually and - of course - be patient.
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