XM Forex Penguin

XM Forex Penguin

6 Shortcuts to Profit When You’re Starting Forex Trading

Home » Blog » 6 Shortcuts to Profit When You’re Starting Forex Trading

Last Updated: Jun 21, 2024 @ 8:13 pm

Starting up a Forex account can be a challenge at any income level, especially when you do not have much money to put into your account. Managing your risk responsibly requires you to risk no more than around 2% of your account per trade. That means it can be really slow-going if you start with something like $100.

Are you looking for some shortcuts that can help you speed things up during these initial stages? Here are a few ideas that may help you grow your account more swiftly.

1. Use trading signals

One thing you can do is use trading signals to help you spot more potentially profitable trade entries.

Signals are exactly what they sound like—alerts that let you know if a trade opportunity exists.

Every signal service uses a different set of methods and rules to generate the signals. Some signals work better than others, and some may fit your risk management and scheduling needs better than others.

2. Try copy trading

Copy trading is similar to trading signals, and is a feature you can find on your forex broker’s platform. Another name for it is “social trading.”

In the social trading area of the broker’s platform, you will find a list of other traders whose trades are publicly available to view and copy. You will be able to check their track records and ratings to see how risky they are to mirror.

With signals and copy trading, you are leveraging other traders’ experience and expertise to your advantage. What works for them should (hypothetically) be able to work for you as well. As the traders you copy profit, you can profit alongside them.

Keep in mind that your mileage can vary based on some of the specifics of how you implement social trading. For instance, if you manage your risk differently than the person you are copying, you could end up with different results.

Another thing to remember is that past returns do not guarantee future outcomes. Sometimes the trader you are copying might suddenly start experiencing drawdown, and you will as well.

3. Learn someone else’s profitable trading method

Speaking of leveraging other peoples’ knowledge, another way you can take a shortcut to profitability is to go a step beyond copying trades. Think about actually learning the method someone else is using to produce their profitable trades.

Yes, this will involve more time and work than copying trades, but it also will give you more knowledge and control over your trading. And it is still a lot less time and work than trying to create your trading system from scratch. There is no reason to reinvent the wheel in forex.

4. Spend time on forex forums

Where are you supposed to get a trading method? You can find them in books and on websites and forex forums. Hanging out on forex forums also gives you some other advantages that can help you jump ahead in your new trading career:

  • You can learn from the mistakes of other traders as they share their journeys. Those are mistakes that you get to avoid ever making.
  • You can discover new trading methods and variations of those methods.
  • You will be able to check out chart after chart after chart. The more examples you see of good setups, poor ones, and everything in between, the easier it will be for you to spot them on your own.
  • You can meet other traders who might end up becoming your friends and sharing trade ideas with you and vice versa.

Spending time among other traders allows you to learn lessons in minutes or even seconds that those traders might have taken weeks, months, or years to learn. Now, that is how you take a shortcut!

5. Stick with your day job

A lot of new traders think that one of the best shortcuts they can take to enter the world of full-time professional forex trading is to quit their day jobs. But they could not be more wrong.

Why does this seem like a good idea? Well, you will be trading full-time with your day job out of the way.

But here’s the thing—you probably will not be doing it profitably. Worse, you will have cut-off access to the income you need to keep up with your bills and continue putting money into your Forex account.

The actual “shortcut” is to keep doing your day job and trading forex part-time for now. This approach allows you to keep up with your bills. Hopefully, you make enough money that it also means you can keep adding to your Forex account.

The reality is that during the early stages of growing a small account, most of your account growth is probably going to happen through deposits, not profits from trading.

Remember, if you have $100 in your FX account, each time you trade 2% of that, you are trading $2. Just being able to deposit $20 now and again from your day job is going to do more to boost your account value than a few small trades a month.

You can consider staying in the demo during this phase, though trading even small amounts of money live does have some useful benefits (like simply getting used to the pressures of trading with real money on the line).

6. Don’t try to take too many shortcuts

Finally, if you are in a huge rush to start making it big with forex trading, you probably are just going to end up getting in your way.

Impatient traders tend to make irrational, expensive decisions in their attempts to jump ahead. They do things like trade 10% of their account at a time or over-trade. But these types of “shortcuts” just end up setting you back further from reaching your goals. So, sometimes the best “shortcut” is just to be patient, and not keep trying so hard to find them.

Take Shortcuts Only When They Make Sense

Some types of “shortcuts” to forex profits end up being the exact opposite. You should not over-trade, trade large amounts of your bankroll, or quit your day job. But other shortcuts can be a big help, like social trading, trading signals, and learning from your fellow forex traders. Try applying some of these smart shortcuts while being as patient as you can in growing your trading account.

Featured Brokers on Forex Penguin

Notify of
Inline Feedbacks
View all comments
Would love your thoughts, please comment.x