The path to a successful trading career is different for everyone, but all traders eventually need to increase their position size. This can be very difficult and stressful, and many traders, including myself, find it challenging.
If you're trying to figure out how to increase your trading
position size, there are some useful methods that can help. In this post, we'll
look at some of these methods.
Why Do Traders Struggle to Increase Trading Volume Size?
Many traders struggle with increasing their position size
once they are able to generate consistent profits with small account size. The
reason is primarily due to the psychological aspect of increasing the risk and
dealing with a higher loss. Additionally, many traders are afraid of losing
some of the capital they have already earned.
For example, let's say you trade stocks, currency pairs, or
commodities with a small position size and consistently make profits daily or
weekly. You feel comfortable with this position size, and everything works
well. However, to achieve your goal of trading for a living, you need to
increase your position size significantly.
Now, your trade risk and account risk are different. Every
time you trade with a larger position size, you feel more pressure and anxiety.
You're more worried about losing your profits, which changes how you trade.
After a few stressful trades, you might go back to your smaller, comfortable
trade size to regain confidence.
This happens to even the best traders. Struggling to
increase your position size can be frustrating and might lead to losing streaks
or even quitting trading altogether.
Additionally, many traders find it hard to figure out the
right position size when trying to scale up. Finding the best position size to
maximize returns is challenging, even for experienced traders, and depends on
how much you want to invest.
Fortunately, there are ways to increase your position size
without getting into a bad trading period. Below, we’ll suggest some techniques
to help you do this effectively.
Trading Strategies – What Is It and How to Use It
One effective approach to boosting your position trading
size is by leveraging diverse trading strategies across various asset classes
such as commodities, stocks, and currency pairs. Narrow down your watchlist to
5-10 assets and track them throughout the week. Focus on 2-3 strategies,
executing one trade per day within these asset classes to optimize your trading
outcomes.
By implementing, you can smoothly transition from a smaller to a larger position size in a less stressful trading environment. With just one trade per day, you can gradually adjust to the new position size without being overly concerned about your trading account balance.
1 – Watchlist (5-10 Names).
2 – Must stick with only (1-3) trading strategies.
3 –Must chooses time frames in a day to trade (Trend Identification, Trade Execution).
Focus on Win/Loss Rate, Not the Account Balance
When you're increasing how much you trade, focus more on how often you win or lose, or how much risk each trade carries, rather than just looking at your overall account balance. If you're thinking about trading bigger, it's probably because you've been making consistent profits.
That means you've found a strategy that works. Your goal now
is to stick with what's been working, but with larger trades. One way to help
with this is to use a trading journal template to keep track of all your
trades.
Trade Large and Small Positions Size Simultaneously
Another way to safely increase your trading volume is by trading both large and small positions at the same time. For instance, if you usually make ten trades a day, you could divide them into five with a small position size and five with a larger one. Keeping track of all your trades in a trading journal can be really helpful with this.
This method lets you gradually grow your position size while still feeling confident about trading successfully. Unlike some other methods, you're not taking on maximum risk here; instead, you're figuring out the right position size for each trade you make.
Embrace the mindset of "Take Big Risks or Don't
Try."
Lastly, some traders prefer a different approach despite
common advice. They're confident in their ability to make profits and feel
comfortable taking bigger risks without overthinking it. They see trading as a
"now or never" opportunity and increase their position size without
hesitation. Remember, a trading career usually lasts only 5-10 years, so they
believe in seizing the moment.
According to this approach, if you have enough money, a solid strategy (especially one based on technical analysis), and the right mindset, you can increase your trading volume without major issues. It might take time and involve some temporary losses, but the potential rewards make it worthwhile.
In closing, ramping up your trading size can be tough and stressful on the path to your trading goals. There's no surefire way to guarantee success in boosting your trading volume, and many traders face hurdles in this area.
However, if you're serious about becoming a trader,
navigating this process, finding the right size for your trades, and using risk
management techniques are crucial steps toward trading professionally. Follow
the tips and strategies mentioned above to help you along the way.