Guest Commentary: How to Scale Up Responsibly in Forex Trading
After some steady and overall successful trading, you feel it is time to move up. Your success so far has been based on hard work. The process included learning to lose some money and accepting the losses. Most importantly, you made more gains that losses and you have been consistent over a few months.
So now you are thinking of scaling up: making more money in your trading. It is important to scale up in a sensible manner. Here's why and how:
Scaling up can be done in 3 ways: enlarging the position sizes (the preferred method), adding more trades in each session, or extending the trading hours. More details are available here.
Whatever method you chose, do it responsibly. Here's how.
One move at a time: If you do more than one move at a time and something went wrong, you will not know what happened. It will be hard to put your finger on the reason: was it the extra trading hours or the pressure due to more trades. Was it both? So, it is better to take one step at a time.
Don't take extreme steps: Don't take your scaling up to the extreme. For example, if you add more trading hours, add one hour and not four. If you enlarge your position sizes, remember to stick to the money management rules.
Wait before the next move: After scaling up once and seeing that it works, do hesitate before scaling up once again. Take your time in verifying that your change worked. As with starting to trade for the first time, early success may be dangerous. Potential greed to disaster, just after you have managed to stabilize your forex trading.
What is your experience with scaling up? Do you use different methods?
Further reading: 5 Most Predictable Currency Pairs
By Yohay Elam, Forex Crunch
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