Real Ways to Grow Your Trading Money

I am still progressing, but slowly. This new week saw my trading account reaching a new high, hitting milestone 8 out of 88 in my quest to grow 1 million pound trading money. An improvement of two levels since my last update. However, the en route journey (so far) is a bumpy one. Nevertheless, I manage to gain some valuable lessons out of this experience.

I will try to sum up my points here:

1. In order to grow your account size comfortably, you need a trading method that can typically generate 1.5 - 2 R, and possibly 3 R in some of the best setup. (R being the reward-to-risk ratio). For example, in forex pips term, you are willing to risk 20 pips to gain 30 pips (1.5 R), 40 pips (2 R), 60 pips (3 R) and so on.

2. The strategy used must capture the essence of trading, i.e. buy low sell high. For swing trading, you are able to understand the swinging price action and hence allowing you to enter positions near the low or high of the day.

3. You have a detailed trade exit plan. In the case of trading multi-lot, you are willing to book partial profit as well as holding the rest of the position for a bigger profit. You give time for the target price to be developed.

4. You have the ability to minimise trading losses. Although you use a stop loss of 1 R, you are willing to cut your losses early as soon as you identify the price action is going against the initial trading plan.

5. The win/lose rate must be better than 50%. The 50% figure is already quite a conservative one. Your trading methodology must give you a real edge, therefore, you must understand where your edge lies.

6. Finally, it is about the trading capital preservation. You should not risk more than 8% on a single trade. My current affordable/emotional limit is a low conservative 5 -6%.