How to increase trading income
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.