› How to increase trading income

How to increase trading income

26.06.2019, 14:57

Every beginner faces a tough challenge of saving first deposit from total loss as statistics is cruel for newbies. Even the smallest revenue from initial trading steps would be a huge victory for beginners. However, if an individual is seriously intended to turn a hobby into a professional occupation, and get revenues from trading, then the question of how to increase profits will rise. This article is not focusing on a particular trading strategy or algorithm, but it’s aimed to find a certain number of settings and rules in order to maximise profits. Sometimes traders make accurate decisions and execute the trading system thoroughly, but they miss several opportunities to improve the revenue, especially when those actions do not require much effort.

There are several reasons explaining that:

Waste of time. For instance, a trader uses medium-term trading strategies and gets to the trading terminal once a day. As a result, a lot of free time is available, which could be used for trading with different systems.

Lost opportunities when a trader who prefers a by-trend strategy missed a sharp price swing.

The lack of system. If the trader does not use the trading diary and does not use effective and proven techniques, then he will not be able to use the full potential of the chosen strategy.

Errors in money management and risk management. Not all mistakes lead to the loss of capital. Sometimes they greatly inhibit the growth of the deposit, which is also unpleasant.

How to increase trading income


Inability to use favourable circumstances and own skills.

Let’s imagine a case when a trader prefers using a scalping strategy on ultra-short timeframes with technical indicators. At the same time, he understands the way how to trade on news and fundamental events. There’s no need to switch from one skill to another as both options could be used simultaneously. Scalping requires a lot of attention, however, all of the economic news is scheduled and it’s enough to wait for it to get an additional income. It’s also worth reminding that traders should use those skills which are tested on practice and obtained well. Adding different techniques without checking them on a demo account is dangerous.

Nonetheless, any steps headed to improve the trading performance and thus increase profits should be described and analysed in a system of efficient decisions made in the past. In this case, a trading diary would help a lot as that’s the only way to make an in-depth analysis of all past actions and results. Any approach will work with a condition of disciplined execution of the trading algorithm tested in regular practice.

Theory of increasing income in trading


The theoretical basis for increasing the income in trading has the goal to answer the question of how to increase the number and strength of the levers of influence of the trader on the workflow. With the proper level of forethought and elaboration of the strategy, it is possible to earn more thanks to previously unused opportunities. First of all, it is worth talking about increasing risks. If you trade more aggressively, the potential profit increases significantly. Of course, the risks also grow proportionally, so this method cannot be called unambiguously positive.

More aggressive trading includes the following features:

Lot increase. A greater leverage potential is involved. For example: if the leverage is 100:1, then, trading in a full lot, for every thousand dollars in the deposit account the trader will receive one hundred thousand at the disposal.

More active trading. It implies entering the market not only by the most tested signals but also if the probability of a false signal remains high enough. The trader deliberately refuses to filter signals in order to be able to enter the market more often.

Trader activity can also manifest itself in the use of a larger number of strategies and longer work. It is about going beyond the usual algorithms: experimenting with session trading or trying to engage in scalping (for lovers of positional trading).

Here we need to mention that increasing the lot affects the cost of each item that passes the price chart. If the lot is equal to one, then the item costs $10, if the lot is 0.1, then it is $1, and if it is 0.01, then the cost of the item decreases to 10 cents. Also, a trader may resort to using new tools. Most reliable strategies are designed for the most liquid currency pairs: EUR/USD, GBP/USD, AUD/USD, JPY/USD, etc. You can begin to use the so-called exotic pairs, in which there are currencies of less significant countries from the point of view of the world economy.

Dealing with such currencies is remarkable in that they are not so stable. The same Russian ruble shows very high inflation and thanks to this it is possible to earn money on its spasmodic fall. In addition, you can split the bill into several parts. One should be used for independent trading, the other should be left as a “safety cushion” for financial losses, and the third should be entrusted to a PAMM manager (that is, an experienced trader who will use these funds to make money returning part of the profits).

More aggressive traders prefer focusing on assets with higher volatility. The main advantage of that kind of assets is that they move faster and deeper. As a result, profits could be enlarged as for example, GBP/JPY would go 200 pips more than EUR/USD in one single trading session. On the other hand, those currency pairs are vulnerable to sudden reversals, false trading signals and deep breakouts. Thus, potential losses could be also increased and the distance of stop-loss orders should be increased as well. Traders with a more aggressive style should have deeper account balances than conservative market players.


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