The fear of losing money stops many traders from increasing their trading volumes for further profit growth. The more capital you have, the more you can lose on each trade. However, if you don’t increase the volume of transactions, then the profit will be negligible throughout your career. What should you do?
Evaluate Your Results
If you want to grow as a trader and accumulate profits then trading volumes must be constantly increased. You will understand at what point it can and should be done:
- The result of the last 2-3 hundred transactions shows that the percentage of successful outcomes has grown significantly
- Your capital allows you to increase your position size
Don't be afraid to enlarge the volume of your trade at the right time. This will not affect your trading system in any way. The only change will be the increase in the profit received.
The risks will also grow. However, when using the right risk-to-reward ratio for each trade, your overall result will still be positive.
Let's Do the Math
Let's say your initial capital is $1,000 and you open trades with a risk of $20. When your balance doubles, it makes sense to start risking $40 at a time. Thus, the volume of your transactions will grow in proportion to your capital:
- $1,000 - $20 per trade
- $2,000 - $40
- $4,000 - $80
- $10,000 - $200
- $50,000 - $1,000
As long as you risk small amounts at a time, the growth of position size will not be a big deal for you. Statistically, traders start to worry when the potential loss rises to $1,000 per trade. They face an emotional barrier that is quite difficult to cross.
At this point, many traders begin to withdraw profits gradually and return to trading with the same volumes. Few people continue to build up their capital when its size exceeds $50,000. However, in this case, you are depriving yourself of huge potential profits and possible financial independence.
Don’t worry. I will teach you how to properly increase trading volumes.
Basic Rules
The hardest part will be overcoming the fear of growing risks. I'll show you where to start:
- First, increase the volume of trades only for the most certain trades - with an accurate signal and additional confirmation. Make sure the trading setup meets all the requirements of your trading plan.
- Try to increase the trade size when you are "on the wave" - when the percentage of successful positions has increased dramatically.
- Add to the volume of transactions a small amount that you are ready to lose. If the risk per trade reaches $1,000, you don’t have to raise it immediately to $1,500. You can start with $1,100 or even $1,050.
- If you still see money in numbers on the charts, it's time to fix it. Think of Forex as something mechanical. The numbers on the screen should be just numbers. This will reduce your emotional engagement.
- Set the same level of risk for every trade and stick to it. With growing capital, the volume of each transaction will enlarge but the risk level will remain the same. Set the limit to 1-2% per trade.
And most importantly, don't be afraid to try. If you have increased the volume of transactions and started losing money, you can always go back to the original scenario. Come back to this issue later when you are emotionally ready for professional and financial growth.