Did you know 90 percent of Forex traders fail?
It’s a cold hard truth, but it doesn’t mean you can’t beat the odds and become part of the five percent.In fact, with the right strategy and emotional fortitude, you can become rich beyond imagination in no time at all. The problem is, most trading advice promotes principles that seem alright at face value, but may not fit with your personal situation.
Sure, you can become a millionaire eventually by trend trading the daily charts and only increasing your lot size after every 500 pip gain. However, given the $400 starting point of most Forex traders, this would take way too long, result in increased risk, and eventually cause you to fail rather than succeed.
To avoid this, I’m about to share with you a proven strategy to evade these pitfalls, methodically grow your account, and become rich trading Forex. Keep reading to learn how.
How to Earn Seven Figures with Forex
“Can I become rich trading Forex?”
This is one of the most commonly asked questions by those new to the risky yet profitable currency trading arena.
If you want to make a million on a single trade, think again. Not only is next to impossible to cash in on a 10,000-pip market move, but doing so would require you to open a position size of 10 lots and earn $100 for every pip gained.
Given the recommended risk percentage of 1-5%, to achieve this you would need a starting account balance well over $10,000.
There is, however, a dynamic strategy to employ in order to rapidly compound your earnings.
Stacking Trades and Scaling In
Unless you’re starting out with five figures, earning a million dollars from a massive market movement like this is impossible unless you stack trades.
By stacking multiple trades on the same market move, you can compound your earnings and make more with each one.
For example, let’s say you’re starting out with $1,000. With this, you’re able to open a trade with a position size of two mini lots and a stop loss of 20 pips while not risking more than five percent of your account.
As discussed in part one of my Turning a Small Forex Account Into a Big One guide, if you take the trade right after a shooting star, engulfing bar, pin bar reversal signal, supply & demand level and your profits begin to build, you can open additional positions and stack multiple trades on a single price movement.
Not only that, but with each trade being placed at a larger lot size than the last, this allows you to increase your profits with less and less market movement.
To do this and take full advantage of market momentum, open your first trade at the normal lot size you trade with given your particular account balance.
How do I spot a market momentum in the first place & how does it looks like?
You will see big candles moving in the same direction with minimal retrace
Where to look for momentum before it happens?
You can’t be 100% sure when a momentum will occur but it usually happens on key levels.
In the Eur/Usd example 1 above price rise from a weekly demand.
Weekly demand from 2003
Reaction of weekly demand from 2003
You can’t just enter because price is at key level. That’s a recipe to disaster. Instead, let the price show you the way & give a good sign.
What is a good sign?
A good sign is a big retracement and the retest of it.
Entry Method 1: Supply & Demand Levels
Let’s take a look on our Eur/Usd example above:
That could be your 1st entry utilizing supply & demand method with pending orders.
Additional entries on the daily chart:
As you can see, you could add 6 more positions without losing a single one*, 7 positions in total.
*You could possible lose position #5 but depending on your money management,that could be a break even entry if you take 50% of your position at 1:1 RR for example or if you move stop loss at break even after price has advanced x amounts of pips.
Entry Method 2: Engulfing candles in combination with Supply & Demand levels.
Let’s see how many additional entries we can get with engulfing candles using the same example as above.
Here you have 4 more additional entries by entering on daily engulfing candles. Again, without a single loss even if you put the stop loss below the daily low candle.
Entry Method 3: Shooting stars + Pinbars
Even though by text book definition Shooting stars and Pinbars are different, to me they are the same thing.
Let’s see how many additional entries we can get by using them.
Here you have 3 more entries without a loss.
Just by using the 3 entries methods above, you could get 14 positions without a single loss!
How to manage your positions
As your profits begin to build, take some of your profits from this trade to open another position in the same direction. Only this time, increase your leverage.
Now, you’re profiting from two trades rather than one and the second trade will make you more money in less time.
At this point, you can take the profits from the first two trades, increase your leverage, and open a third position in the same direction.
How to add even more positions
As an example, you could open a position on a pin bar or shooting star on the daily chart, and then open more positions using the 4-hour chart to identify additional pin bars and optimal buying or selling opportunities.
Here are some additional entries on the same example we used above, Eur/Usd.
For instance, let’s say you open a EUR/USD buy position on the emergence of a pin bar on the daily chart. You then switch to the 4-hour chart and open a second position in the same direction when you identify another pin bar, and the distance between the two points is 400 pips.
Trading a single mini lot, in which each pip is $1, you will have earned $400.
When you see a new pin bar forming on the 4-hour chart, you can then move the stop loss on the first trade and lock in $200 in profits. Regardless of what happens, you will secure $200.
You can then use that $200 in guaranteed profits to open a second position at a larger lot size when the next pin bar forms.
To calculate the size of your subsequent positions, divide your profits by the distance between the stop of the first trade and the entry point of your second. In keeping with our example and assuming the distance was 60 pips, you would place your second trade at approximately three mini lots.
Remember, you’re first trade is still running as well.
When another pin bar forms to provide another buying opportunity, once again use the total profit from the first trade, not the second, to up the leverage yet again and open a third trade.
To determine the lot size, simply divide the total profits of the first trade by 50%. So, if you’re in profit $1,100 on the first trade, the maximum you will want to place on this final trade is $550.
When you factor in the stop loss distance of the last pin, you may be able to open your last trade at twice as much as the second, which in our case would be six mini lots!
Plus, the first two trades are still running and making you money as well!
With the third trade, your profit could top $1,500 in only a week, so at this point you may want to consider taking your profits from trades two and three, which may net you upwards of $5,000 or more.
I recommend closing the last two trades and keeping the first trade running to see if any new pin bars appear and if you’re able to take advantage of even more buying and scaling opportunities. If one does occur and there is no sign of a long-term trend reversal in sight, you could once again use the profits from the first trade to repeat the scaling process.
While I used the daily and 4-hour timeframes for our example, you can use this strategy on any timeframes you want. If you’re a day trader and really want to snowball your earnings to reach $1 million in no time at all, you can easily spot trending movement on the 5- or 15-minute charts and scale exactly like we did above.
The Freedom of Multiple Positions
Taking multiple positions in the market gives you ultimate freedom and flexibility to test and tweak your trading methods.
For instance, rather than having two or three trades open with lower and higher amounts of leverage, you can have several smaller trades open on strong trend movements. You can even have multiple trades open at the same time on different currencies.
Not only will this allow you to better mitigate your risks, but you’ll still earn equivalent profits.
Trading this way will also make you a sharper trader. Most traders open a trade and wait to close it before placing another. Most never think to open more trades.
When you find yourself in a winning trade, you should be placing additional trades in the same direction. That’s the key to becoming rich in Forex. It’s all about momentum.
Can you become rich with Forex?
Although trend movements like the example above are rare and growing a small account into a large one with five, six, or seven zeros is no easy task, it can be done.
My goal with this post was to give people just like you a genuine, real method for rapidly growing small accounts into large ones. While some people may not agree with these trading strategies, they work.
If you keep following the same old trading advice, you won’t be able to advance in your trading career. The stats speak for themselves. According to Oanda, 60% of their clients lose money, and many think this number is far too low.
This is proof that traditional trading advice consistently delivers poor results. If they didn’t, much more people would be making much more money.
Thanks for stopping by.
Be bold and conquer young trader.
Hit that share button!
Have questions or comments? Please leave them below.