Working with a limited amount of capital you want to put towards your trading? Whether you’re working with a fixed monthly budget - say, your BluFX funded forex account subscription plus some budget for education - or you’re short of cash at the moment, here are some tips on how you can make your money go further while trading.
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How to make your trading money go further
Start with self-awareness
Most people think they know their emotions and their limits. But if you want to make the most of your money as a trader, put yourself to the test and find out if you're aware of how much risk you're willing to take on in a trade. You can do this by creating rules for yourself and sticking to them.
Set goals for how much profit or loss you can accept in a given trade, and stick with those rules no matter what happens or what the market throws at you. If you're disciplined enough to follow these rules when things move fast, you're ready to start trading for real money.
Good traders know that no matter how good or bad things are going, they need to stick to their trading plan and be disciplined in their approach to trading and managing risk. The only time a good trader deviates from their strategy is when they have new information that changes how they feel about the market.
Invest in upgrading your skills
You don't have to spend everything you have on trading. Investing in things that last helps you build wealth over time. Investing in forex education or upgrading your skills will help you reap the benefits later. For example, if you learn new high-probability setups or a strategy, it will pay for itself over time as your earnings increase.
The market is a school that never stops teaching. The best way to become a better trader (and make your money go further) is by learning about the market. The first thing we recommend is taking an online course or reading trading books about technical analysis. You can also invest in yourself by learning financial literacy skills, like budgeting and investing principles so that you won't be as vulnerable if the market takes a downturn.
Discover the best forex trading books here>>
Focus on long-term rewards
Many traders get caught up in the momentary excitement of a big win or quick profit and forget about the long-term goals they had when they first started trading. Watching your profits skyrocket in a matter of minutes is exhilarating. Still, it's often difficult to keep that same level of excitement over several years as your investment grows into a million-dollar portfolio.
If you want to succeed at investing, you have to maintain your focus over the long haul and not get discouraged by temporary losses. Instead of looking for quick profits and trading based on emotions, think about how your investments will affect your life in five or even ten years.
The best way to increase trading capital is to combine winning trades and increasing leverage. Traders should think long-term and look to grow their accounts slowly over time. There are many ways to improve our chances of winning in the markets, but there are also numerous ways to lose money if we don't understand proper risk management.
Treat trading like an investment
One of the best ways to ensure that your trading budget lasts longer is to treat your trades like investments rather than gambles. This means setting realistic goals and expectations around what you can achieve with your money, making plans for the money you have, and working toward achieving those goals.
It's also essential to ensure that the time and effort you spend on investing is time well spent. If trading isn't something you enjoy doing or is taking away from other things in your life, it's probably not worth pursuing. You don't need £10,000 or £100,000 to start trading; you can start with a small account and work your way up. Some brokers offer low minimum deposits, but your first trades don't have to be large ones, even if they don't.
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How you trade
Set good risk strategies and follow them. If your account size is too small to take significant risks, keep it that way. Don't get greedy because a trade is going well. Take your profit and move on to the next opportunity. Again, don't risk more than 1% of your trading capital on any single trade, and never use the money you can't afford to lose.
Another mistake many traders make is not knowing when to cut their losses. If you have a trade that isn't working out, get out of it ASAP! You can always get back in after the market makes a move in your direction, but you'll never know when that might happen unless you get out now.
Finally, having stop-loss and trailing stops in place will help protect your capital from unexpected downturns in the market and prevent you from getting caught in a losing position when the market reverses course.