Direct from the desk of Dane Williams.
As a forex trader, I’m sure you spend more time than necessary, wondering whether it’s possible to increase your position size, all while maintaining minimal risk?
Well, the answer to your question lies in a methodical strategy that requires a judicious blend of caution and a profound comprehension of market intricacies.
Put simply, the answer is yes, it can be done.
But you’re going to need to be super disciplined in order to pull it off.
How to do it
I want you to consider a scenario where you’ve entered a trade and the market immediately moves in your direction.
Rather than sitting back and being happy with your trade, there exists a method to compound your gains without unduly exposing yourself to further risk.
The approach doesn't involve indiscriminate leveraging, rather it entails a measured increase in position size.
All the while adhering to the meticulous risk management principles that I continue to preach here on the blog.
As I mentioned at the top, the linchpin of this strategy lies in you exercising self discipline.
Assuming an initial risk management approach allocates a modest 0.5% risk per trade—a prudent safeguard for capital preservation if ever there was one.
Well, if during the course of the trade a positive move of, let's say, 25 pips is achieved, you are presented with an opportunity to add into your position.
By adjusting your stop loss to break even and introducing a new position of equivalent size, your overall position size increases without adding to your risk.
This introduces a subtle yet effective leverage on the market's momentum, without compromising your original $50 risk.
Alternatively, you could opt for a more aggressive stance, doubling your position size and setting your stop loss at 25 pips.
Either way, these deliberate approaches allow for a nuanced engagement with the forex market, increasing your position size on winners.
All about discipline
This approach necessitates a delicate balance between risk and reward.
A meticulous manoeuvre that demands precision.
It's not a matter of indiscriminately embracing leverage, but rather it's a deliberate increase in position size as the market moves in your direction.
While gains may be incremental at times, the potential for significant profits materialises in high momentum moves where the market refuses to retrace at all.
I know I keep coming back to it, but crucially, success in this strategy hinges on your ability to exercise a high degree of self discipline.
This methodology is straightforward, but unforgiving if you stray from your stop levels.
Deviate even once and you are no longer increasing your position size with minimal risk.
Instead, you’re just gambling.
This strategic approach rewards patience and discipline, providing a pathway to amplify forex position size without courting undue risk.
Final thoughts
As I’ve shown, the answer to the question of whether you can increase forex position size with extremely low risk comes with a caveat.
Success in this endeavour requires a meticulous amalgamation of risk management, market acumen and disciplined decision making.
It can be done.
But stray from your risk management principles and you will get found out.
Best of probabilities to you.