Growing a Small Forex Account Consistently
Growing a small forex account consistently and quickly is the name of the game, and is what we are here to teach you right now.
Rules for Growing a Small Forex Account
Let’s go over the most important rules that you need to follow for growing a small forex account in a consistent and reliable manner.
Get an Education
If you are starting with a small Forex account, or you are just a trading newbie in general, the number one thing that you can do is to get yourself a good trading education. Not to sound condescending, but when it comes to forex trading, it definitely helps to know what you are doing. The fact of the matter is that Forex trading is quite difficult, and if you have no idea of the basic concepts and strategies, you’re going to have a very hard time making money.
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Once you have a basic education under your belt, the next step to growing a small forex account is to be consistent in your approach. This means that you should master one or two really good and time tested trading strategies, and then stick with them.
If the strategies you are using are proven to work, and have worked for thousands of other people, then there is no reason to throw in the towel as soon as you lose some trades. Flip flopping from one trading strategy to another is not going to get you anywhere. You need to be consistent in your approach, because this will provide consistent results.
Manage Your Risk
If you have a small forex account, one of the worst things that you can do is to invest way too much money into a single trade. This is why every good trader knows all about risk management techniques. One of the most common risk management techniques that you need to follow is the 3% rule. This means that you need to invest no more than 1% or 3% at the most into a single trade. Therefore, if you have $1000 to trade with, you should not place more than a $30 trade.
This also goes for lot sizes. As a total newbie trader, you should trade with lot sizes of 0.01 or 0.02 at the most. As you gain more experience, you can then increase your lot size is 0.30. The bottom line here is that you just don’t want to invest too much of your total trading capital into a single trade, because if that trade ends up being a loser, you will blow your trading account.
Use Many Timeframes
When you have a small forex account and you want to find the best entries into trades, one of the biggest mistakes that newbies make is to only use a single time frame. You never want to judge your entry into a trade on a single time frame. This is a recipe for disaster.
When finding the best entries to trades, you should consult one hour time frames, 4 hour time frames, one day timeframes, and even very short 15 minutes time frames. There are things that you can see on short time frames that you can’t see on longer time frames, and vice versa. Always consult multiple timeframes when finding the best entries for trades.
Don’t Overtrade for Losses
When you have a small forex account, those losses can seem very costly. For this reason, many people will end up over trading, and trading very irrationally and emotionally in order to try to make up for those losses. Well, remember that trading is a very rational and logical thing. If you start getting emotional, over trading, and start treating trading like gambling, it’s a surefire way to just lose more money. Over trading in the hopes of making up for losses usually dressed results in heavier losses, not making up for the losses.
Take Profits ASAP
In order to grow that small forex account consistently and quickly, you also need to get into the habit of taking your profits and locking them into place as soon as possible. Yes, a lot of people will try to stick with winning trades and to keep them open for a long period of time in the hopes that their profits will keep increasing.
However things don’t last, and every good thing comes to an end, and this includes a winning streak. Therefore, if you have already made like 50% profit on a single trade, it’s a better idea to walk in those profits then to stick with the trade. The things go South, the trade might turn around and you could end up losing it all. Remember folks, having a good risk to reward ratio is key when it comes to growing a small Forex account.
Fundamental News Matters
If you plan on being a profitable trader and growing that small forex account consistently, you always need to pay attention to fundamental news before you start trading any given day. Fundamental news calendars are extremely important to pay attention to because they provide you with valuable information on the direction that the currency will head in on any given day.
What you are looking out for here is 3 star news. If you see that any currency has three star news listed next to it, it’s best to stay away from trading with that currency until the news event has passed. These news events are very unpredictable and they can greatly affect the values of any currency that is related to batman’s event.
Keep Leverage Low
If you have a small forex account, you might be tempted to use high amounts of leverage in order to train with more money than you actually have despair. Well, if things go bad, and you lose a trade, you’re actually on the hook for that full amount that you leveraged. If you lose a trade, you can end up losing much more money than you actually have to trade with or to spare.
This puts a lot of people in very difficult positions. Therefore, as a newbie trader, you want to stay away from leveraging your trades as much as possible. If you do leverage your trades, don’t leverage them by huge amounts. It just isn’t worth it.
Stick with Strong Trends
To grow that small Forex account consistently the other thing that you need to pay attention to our trends. The bottom line here is that you only want to trade with very strong trends. Don’t trade weak trends, don’t trade ranging markets, and don’t trade against trends either. Yes, pro traders can trade against trends and be successful, but as a newbie trader, this is exceedingly difficult.
Growing That Small Forex Account – Final Thoughts
As you can see, to grow a small forex account, there are many tips and rules that you need to follow. However if you manage to keep everything in mind that we talked about here today, your journey to growing that small forex account into something substantial should not be all too difficult at all.
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