How to increase your Forex profits. Forex profit: myths and reality. Good entry points

Increasing profitability and reducing risk– one of the most difficult tasks for a Forex trader, regardless of his trading style. First of all, it depends on the return/risk ratio and profitability.

Every currency trader, which is quite natural, strives to increase the profitability of his trading and reduce the risks of losing his investments. Unfortunately, this desire sometimes runs counter to the ambitious goals that the trader has set for himself. Often, a trader manages to increase the profitability of trading and the profitability/risk ratio in general by shifting the emphasis from the percentage of positive transactions to the amount of profit from the transaction and the time to achieve it. There are specific recommendations that allow a trader to achieve his goals, forgetting about emotions and financial difficulties.

Competent money management

First of all, of course, this smart money management strategy. risking a small percentage of his funds does not experience an acute fear of loss. If the trader's risk is a certain percentage of the asset price during each trade, then he has confidence in smaller losses and larger profits. In this case, considering the situation from an emotional point of view, it is much easier to use various tactics to reduce risks in Forex and maximize profitability. Another fairly effective method is to change the position size depending on market dynamics, including varying the percentage of the asset price.

Correct entry into the market

You should approach the choice of entry point into the market with greater responsibility. Instead of taking a position that has the potential to make minimal profit, you need to look for opportunities to enter the market, the profit from which will be maximum. Simply put, it is better to open a position with a 20% chance of making a profit that is ten times the possible loss than a position with a 55% chance of making a profit equal to the stop loss.

Reducing losses

There is also a “secret weapon” for increasing the return/risk ratio - this is strict limitation of losses. Analyze your trades and pay attention to how many positions showed positive dynamics from the very beginning. Sometimes, in order to win more often, you need to reduce the allowable amount of losses by half. You should not expect this measure to increase profitability - it is aimed solely at reducing losses.

Timely exit from a position

And, finally, competent tactics for exiting a position are needed. The best way to stop at the right moment is to refusal to partially commit a transaction that has a low return/risk ratio.

In principle, any tactic for exiting the market requires a fairly high return/risk ratio before closing the position. To do this, it is necessary to use methods of technical and fundamental analysis, study the properties of the asset being traded and develop an optimal trading strategy.

Particular attention should be paid to the above-mentioned limitation of possible losses and the volatility of the asset.

Do not neglect the order, as well as closing the position manually, in accordance with the time frame. As an alternative, you can change the level of the loss percentage limit in accordance with the achieved return/risk ratio. For example, having a return to risk ratio of 3:1, you can determine the limit on unrealized profit of about 75%, with a ratio of 6:1 the limit will be 50%, with a ratio of 9:1 - 25%.

From the point of view of the return/risk ratio, it should be perceived as follows: with very high risks, the potential profit should be approached conservatively.

Every beginner faces the problem of increasing income from activities. A novice trader faces several pressing questions. First, you need to correctly manage the deposit amount in your open account and try not to lose the entire amount if losing trades are suddenly made. Then you need to correctly summarize the transactions performed for the reporting period, for example, for a month, bring the balance to zero, and then build a trading strategy in such a way as to make trading transactions only with a profit.

What ways can you increase the number of profitable trades?

Method number 1. Increase the volume of trade transactions. This is one of the simple options to increase profits. To do this, you just need to top up your open trading account or increase your leverage. But changing the amount of leverage, especially increasing it, needs to be done very carefully. To do this, the trading strategy is analyzed, its effectiveness when changing leverage, the possibility of securing trade transactions in this case, the possible level of forced closure of transactions (stop out), the amount of the required reserved collateral of funds when making a transaction - margin (margin call). If the leverage changes, the stop loss amount may also be revised. If, for example, the size of the loss is 10%, and the leverage is increased 10 times, then the stop loss will be more frequent, this must be taken into account, otherwise you can lose the entire amount on your trading account. It would be optimal to increase the leverage by 2 times in the case of trading transactions.

Method number 2. Increasing the amount of stop loss. By setting a small stop loss size, which is triggered very often, even with a trade that is obviously executed correctly, the trader may remain at a loss, since the limit will be triggered and the trade will automatically close, although for some period of time it could still have worked with a profit. You can increase the stop loss amount by several points and analyze the profitability of transactions in this case. Often such a change in the size of the limit increases income several times.

Method number 3. Try to increase your income from one move in the foreign exchange market. When opening a deal, you need to keep it open for as long as possible at the most favorable moment in the market. To do this, you need to have a good understanding of the trend movement, the frequency of corrections, and their sizes.

Method number 4. Be able to determine the correct entry points into the foreign exchange market - opening transactions.
It is important and profitable to be able to open a deal at the most opportune moment, which occurs in the foreign exchange market at the end of a trend correction. If you don’t rush to open trades when there is no change in the correction, you can decide on the most successful entry points into the market. The risk of trading transactions does not increase, and income can be increased several times.

Method number 5. Binary options trading.
To increase profits from transactions on the foreign exchange market, you can trade binary options. There is nothing complicated, even a novice trader can increase his income from such transactions. It is important to understand trading strategies for this type of trading and choose a reliable brokerage company with favorable conditions.

The only goal of any trader is to make a profit, preferably more. In principle, you can start trading without any idea of ​​how profits are formed in the foreign exchange market, but it is better to spend a little time on the theory. This will help set adequate trading goals.

There is a fairly common misconception that trading in the foreign exchange market is a way to get fabulously rich in a relatively short period of time. Of course, there are such examples in history, but they are very few. This myth exists precisely because new traders simply do not understand how Forex profits are formed.

As a result, ignorance of basic things leads to disappointment, because the trader expected that by investing $100-$300 he would earn the same amount in a few days, but subject to the rules of money management, this is impossible. The psychological state of a trader can be considered one of the most important components of success, so it is worth understanding in more detail the issue of generating profit in the foreign exchange market.

How is Forex profit generated?

There are only 2 options: bought cheaper, sold more expensive and vice versa. Let's consider a simplified example: if you buy $100 at the rate of 1.2 euros, then the trader will have €120 in his hands. After some time, the dollar strengthened its position a little and the exchange rate became equal to 1.17. If we now convert the euro into dollars, then we will no longer have $100, but $102.56, and these $2.56 are the profit due to the change in the exchange rate.

Of course, in the example considered, the profit is ridiculous, but the principle of its formation is clear. Since not every trader has the opportunity to open a deposit of several thousand dollars, such a concept as leverage is introduced, it is used to conclude transactions of a larger volume.

Let’s assume that a trader has a deposit of only $100, if he concludes a deal with a volume of 0.02 lots (for the EUR/USD pair), then the contract volume will be as much as $2000, while the trader’s deposit will be $20, and the broker will lend him the rest.

At first glance, it may seem that the broker will be left in the cold, because if he fails to make a profit on Forex, his losses will be great. But this is only an illusion; in fact, the maximum losses on a given transaction will be limited by the size of the trader’s deposit. You can independently calculate the deposit level at which a “margin call” will occur, that is, the position will be automatically closed.

This occurs if the account balance minus losses is less than the collateral amount for the position. The minimum balance depends on the type of account and the specific DC.

Let's assume that the minimum level for a margin call is 50% of the collateral amount. In our example, the situation will develop as follows:

• the trader was unlucky and had $10 left in his account (half the amount of the deposit);
• if the margin call was triggered, then the value of the position at the time of closing was $20+$1980-$90 = $1910;
• the broker takes the balance of the borrowed funds ($1910) and $70 to cover his losses. That is, the broker will return his money in any case, but the trader will only have to replenish the deposit and continue trading.

Forex profit and pip price

In order to independently estimate the potential profit on a transaction, you need to be able to determine the cost of one point. In this case, there can be 3 different options: direct quotation (the dollar comes first in the pair symbol), reverse quotation (EUR/USD, etc.), as well as crosses (AUD/CAD, GBP/JPY, etc.). ).

The easiest way to determine the value of a pip is through a direct quote. The formula in this case will look like

P = Lot ∙ S/Price

The following designations are used: P – 1 point, Lot – lot size (in the deposit currency), S – minimum quote change step, Price – current price. For example, for the USD/JPY pair with a lot of 0.01, the cost of one pip is P = 1000∙0.01/95.51 = $0.1047.

For reverse quotation, the formula will change slightly

For EUR/USD and the same starting conditions, for example, the cost of one point will be P = 1000 ∙ 0.0001 = $0.1.
The most difficult thing to determine is the price of a point for crosses; the following dependence is used

P = Lot ∙ S ∙ Price(base pair)/Price(current currency pair)

Or you can do it much simpler and use one of the many online calculators. The result will be accurate.

The influence of style on Forex profits

At the initial stage of trading, many people feel that a day without several transactions is wasted. As a result, this leads to numerous transactions with efficiency close to zero. Piping is far from the best option for stable profits, and scalping does not always allow you to achieve good results.

In order to prove the ineffectiveness of too intensive trading, we will compare several options for concluding transactions (we will not consider pipsing, since it is akin to a lottery).

When concluding transactions on small time frames, the target rarely exceeds (20-40 points), moreover, this style of trading is characterized by a large psychological load and takes a lot of time. In addition, on small timeframes the influence of price noise becomes too noticeable.

When trading on a time interval from h1, it is enough to simply check the market several times a day. The target for a trade can be about 100 points or higher, and the trade can remain open for several days.

As a result, in 5 days you can conclude either 2-3 deals on h1 - h4 with a profit of about 300 points, or about 10-15 deals with smaller goals (about 30 points). At the same time, you also need to take into account the influence of the spread; 15 transactions will “eat up” 30 points of the spread, or even more (depending on the pair). And if we also take into account the time costs, then a calm trading style is clearly a winner.

Summarizing

Forex profit is the main goal of any trader; it is unlikely that anyone engages in trading just to tickle their nerves. A correct understanding of the mechanism for generating profit when speculating in currencies will help you set adequate goals for yourself, which means there will be no disappointment when moving to real trading. This is important, because the trader’s emotional state also affects the effectiveness of trading. Source:

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- the main place to earn money. Beginning traders gain new knowledge, learn existing and develop new strategies, delve into the essence of the market and work 18 hours a day. What is all this for? There is only one task - to increase on Forex. But as practice shows, not everyone succeeds in achieving the expected and stable income. You can trade several thousand in one month, and then successfully lose everything in a few hours. Where there is no stability, there is no income. Let's figure out how to increase your earnings on Forex. The recommendations are very simple. They are based on the experience of tens of thousands of successful traders who work and earn money on Forex. Profit is calculated not only in monetary terms (as we are used to), but also in the time spent on training and trading.

What is profit in Forex?

Let's look at this issue in more detail. For example, a trader managed to earn $1,000 in one week. At first glance, this is a very good income. But we don’t know what the initial deposit was. It is more logical to express your profit as a percentage. If the deposit was $100,000 and the earnings (as we already mentioned) were $1,000, then the total return was only 1%. Everyone can boast about their earnings in a different time range. For example, you traded 20% in a month, and your friend – 100% in a week. Everything is relative. It is very important what the deposit was. If its amount is $50, then even 20% per month will not add joy. With a deposit of $10,000, the result will be more impressive. We are so zealous in discussing the issue of profit that we have forgotten to consider another point - where it comes from. For example, you bought euros against the US dollar. Some period passed and the euro became more expensive. You sold this currency and made a profit. You can also work in the opposite direction, that is, predict a price drop, open a short position and sell. In what case do you receive income? After the price opens, the curve must travel a distance greater than the currency pair. For example, the broker set a spread of four points for “euro-dollar”. You will be forced to wait for a movement of five points or more. When opening a transaction, the extra spread will brazenly “gobble up” part of your profit (profit). With a single trade, these losses are not too noticeable. It's another matter if you are a day trader and make dozens of transactions. In this case, the losses are higher. Yes, you will understand everything yourself if you make simple calculations taking into account weekly trading. The size of the spread affects the overall Forex profit. This is 100%. What can be concluded? To get maximum earnings, choose a good broker. What criteria should I focus on? I would advise you to pay attention to experience, rating, minimum spread size and order execution speed. Today there are traders who do not look at the size of the spread at all, but in vain.

How to increase earnings on Forex?

Now let's look at how to increase your income on the stock exchange. I give only the most effective advice that works and gives the expected result: 1) Don’t like trading robots and don’t trust them? – Learn to work with them correctly. If you don't let automated trading take its course, it can be very useful. How? A smart program relieves you of your workload, performs unimportant tasks, and frees up time that you can spend on yourself. The body needs emotional relief. If there is no rest, the head malfunctions and everything goes wrong. Another question is where to get a profitable advisor. But this is a separate topic. 2) Try to compare the amount of the deposit and the position being opened “according to your means.” There are those who open a deal for only 0.01 lot. And this despite the fact that they have tens of thousands of dollars on deposit. Remember the basic rule of Money Management - the transaction should not be higher or lower than 1-2% of the total deposit. Let this become your rule in trading. 3) Constantly learn and practice. No matter how much you earn, no matter how stable your earnings are, always improve your skills and practice. Risks are a slippery thing. Today they are alone, tomorrow they are different. If you don't keep up with the risks, you will invariably lose. At least understand in general terms how the market works and what drives it. Throwing in “blindly” is stupid. A good trader will always figure out why the price “went” in one direction or another, what determines its movement. For example, two red candles appeared on the chart, followed by a green (corrective) candle. In such a situation, we expect the price to fall - that’s what we play on. I gave a rough example, but I think the essence is clear. 4) Do you have any free money? - Let them work. Under no circumstances let them “gather dust” without use. This is especially true if it brings good profits. You can diversify your earnings by investing money in PAMM accounts, for example. As a result, the profit adds up and grows (which is what we, in fact, are trying to achieve). The main thing in this matter is to be careful when choosing a direction and not to trust “slippery” guys who promise huge percentages.

conclusions

Increasing earnings on Forex is real. Approach trading wisely, read smart books, learn from experienced traders, improve your skills, practice and follow the tips given in the article. "Knock Knock". And here it is - your luck.

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Both experienced traders and newcomers to Forex want to increase their profits, as well as find an additional source of income. The most obvious options are to improve your trading strategy, choose a competent advisor and improve the trading system you use. However, on Forex it is possible to increase income in other ways, the level of risk of using which is either minimal or non-existent.

The first option is the annual percentage. If a dealing center provides this type of service, then the trader can receive income from the funds that are in his trading account. In most cases, the ready percentage is around ten percent. It’s hard to disagree that this is an almost ideal option for generating additional profit from assets.

Another option is a positive swap. A swap is the conclusion of two transactions of opposite nature. The task of one of them is to close all current positions, and the second is to re-open positions closed by a previous transaction for exactly the same volume, but at a price that includes the cost of transferring positions. If during the transfer the quotes go up or remain at the same level, then after the transaction is closed, the client fixes a zero or positive swap. When the opposite situation occurs, the trader also makes a profit, which depends on the difference between the loss incurred during the previous transaction and the size of the positive swap.

It should be noted that these are not all methods of safely increasing profits on Forex, but they are the most effective and most used by traders around the world. Thus, if you trade on the stock exchange and want to increase your income, then you can safely use the methods listed above.