One of the most pertinent questions that many budding forex traders ask is – is it possible to scale up the business? This question is crucial because every venture needs to grow after some time. The fact is, you can scale up the forex business, but you need to be cautious. The forex market has many risks associated with it. Since forex trading is not often considered as a form of investment due to the lack of physical goods of trade, many people assume that trading is just a daily activity that is unchangeable. Expert traders, however, tend to scale up their trading business at the appropriate time. Let us look at some of the ways you can scale up in the forex trading business.
1. Open multiple positions
The first way you can scale up and earn more profits is by opening more positions in every session. When you have more trading options open in the market, you stand to gain more. Many traders who have been in the market for a considerable amount of time can comfortably increase their number of positions without having to worry about losing trades. As you trade more, you learn how to properly manage your time. You can squeeze in sizeable trades in your typical trading sessions and gain more money.
Sometimes, being too careful can hinder you from gaining more. Opening several positions should only be left for experienced traders though. As you increase the number of trades, your speed and agility are required to ensure that there is no pressure on you. You can also use more pairs across the different positions you open in the market. Trading multiple pairs is one means to achieve a balanced investment portfolio in the forex market.
2. Increase the position sizes
Most traders prefer to scale up using this method. As you gain more money, it becomes necessary to increase the usual position sizes. You don’t need to alter other aspects of your trading schedule with this method either. The only thing you need to do is increase your investment and stand a chance to reap more benefits. Increasing the position sizes makes sense for traders who have already figured out the market.
With a proper journal by your side, you can be able to make references to your initial trades that performed well and apply the strategies you used on your bigger trades. It is important to note that the larger the trades become, the more pressure you feel. Managing your temperament is thus important with this method.
3. Trade for more hours
This method is particularly beneficial to day traders who spend most of their time on the market. If you have struggled to move beyond your normal earnings, you might consider adding more hours to your day. In the past, traders did not have many options as the markets were limited to certain trading hours.
Today though, any trader can access all the financial markets in the globe. You can thus increase hours by taking advantage of the different currency markets. The only thing you need to take note of is your time management skills. The longer you trade, the more tired you become. You should have a proper balance where you can gain more but still keep the trading time within tolerable levels.
As stated earlier, scaling up comes with its share of risks. As you increase the size of your investment, you also open yourself to higher risks. It is therefore important to reassess your risks management techniques to scale up successfully. One of the things you can do to manage the risks is to use the available technology. If you decide to increase your time in the market, you should create an option for mobile trading. Over 35% of trades are already being handled by mobile phones in the current market. If you decide to increase your investment per trade, you should use better indicators.
After being in the market for several months, you will find it necessary to scale up your business. The most important issue at this point will be to have a sensible risk management plan. Beginners should not consider scaling up as they need more time to learn the market well. If you feel that you are ready to scale up though, you can apply the various strategies highlighted above.