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Turning A Small Forex Account
Into A Big One Part 1
2
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This is going to be the rst of two articles where I outline some pro t
building techniques for you to be able to use to increase the size of your
trading account quickly and safely.

Turning a small account into a big one is the dream of many forex traders,
unfortunately for most traders this is what it will remain as….

Most of the trading advice found online and in books advocates certain principles for
trading which sound like good advice on the surface, but in reality when applied to
your personal situation is actually very silly.

Table Of Contents [hide]

How To Make A Million From Forex

Scaling In
The Last Trade
Why Having Multiple Positions Gives You More Freedom

How To Make A Million From

Forex
 

To make a million on one trade requires that you place a 1000 lot position. This
means for every 100 pips the market moves in your favor you will make £10,000,
since we want to make a million we need the market to move 10,000 pips.

Let me give you an idea of how far that is.

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(https://dlb6879620p6s.cloudfront.net/wp-content/uploads/2015/11/Aviary-
Photo_130918081620244768.png)

This entire down trend on EUR/USD is only 3500 pips.

If you had placed a 1000 lot position on the high right at the beginning of this down
trend and then proceeded to exit at the low (which would have been impossible) you
would have made £350,000 which, while a lot of money, still isn’t the million we
want.

The only way to make a million from a movement like this is to stack multiple trades
onto one movement, this way we are increasing the size of our pro t even though the
market is moving a smaller distance.

If we were to have three 1000 lot trades placed onto the downtrend above we would
make £350,000 on each trade which works out at just over 1 million.

The problem is most traders when staring out do not have the funds required to be
able to place 100 lot positions let alone 1000 lots.
For me to be able to place a 100 lot trade require me to have £400 available in my
trading account, this is probably more than what most people are starting out trading
with.

Then there’s the issue of stop-loss.

A 10 pip stop-loss on a 1000 lot trade works out at £1000 risk, so before we can even

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think about placing trades this size we need to scale up from lower amounts.

Scaling In
 

Scaling in requires us to nd a pre-existing trend or movement in the market then

place multiple trades onto this trend with each successive trade being placed at a
higher amount than the last.

This method begins innocently enough, our rst trade will be at our typical trade size
which we usually trade with, then, as the pro t begins to build up on our rst trade
we will take some of the pro ts o the position and use them to place another trade
in the same direction at a higher leverage.

Now we have two trades in the market both making money for us, the important
thing to remember is the second trade we placed will make more money then the
rst in a shorter amount of time, meaning we can place our third trade sooner rather
than later and at an even higher leverage.

A er taking even more pro ts of our rst two trades we can placed our third trade.
The size of the third trade will determined by the pro ts we have taken o of the
previous two trades.

If you’ve looked at my article ‘Daily Charts Vs 1 Hour Charts’

(https://www.forexmentoronline.com/daily-chart-vs-1-hour-chart-which-one-
should-you-trade/) you might remember this image:
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(https://dlb6879620p6s.cloudfront.net/wp-content/uploads/2015/11/Aviary-
Photo_130943198182079459.png)

In that article I described how I traded the one pin bar above on the daily chart as
well as trading another three which were found on the 4 hour chart.

Now although I didn’t scale in on these trades I thought they highlight a good
example of a how scaling in should be done correctly.

Let’s run through how you would have scaled in using the example above.
Our rst trade would have been on the pin bar marked with an x below It on the
chart, this is what we call the initial trade.

The initial trade is always taken with the same trade size as you usually use on all
your other trades.

The trade we take on the second pin bar will be placed using a portion of the pro ts

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we’ve made on the rst trade, looking at the image you can see the distance the
market moved from then rst pin bar to the second is around 500 pips.

This equates to around £500 pro t if your trading at the lowest possible amount.

When we see this new pin bar we move the stop on our rst trade to the price at
which we would be in £250 of pro t, this is marked with a red line on the chart.

Now no matter what happens we have secured £200.

We are going to use this £200 on our second trade with the newly formed pin bar.

The distance of the stop from the entry on the second pin is 80 pips, meaning we
size of this trade is going to be 3 mini lots:  £250 ÷ 80 = 3

We place the trade at 3 mini lots, its important to note that we still have the rst trade
running, as the market continues higher this trade will accumulate additional pro ts
for us.

The Last Trade

 

On the third and nal trade we are going to use pro ts from both of the previous
trades to place an even bigger trading position.

When this 3rd and nal pin bar forms our rst trade is in pro t of around £1270 with
the second trade in pro t of £2400 even these two trades on their own have made
really good pro ts for us, because of this, we only want to use the total amount of
money made on the rst trade to decide how much higher leverage to use on this
third and nal trade.

50% of £1270 = £635

So £635 is the maximum we are going to place on this last trade.

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Now the stop-loss distance on the last pin is 100 pips.

Which means we can place a trade at 6 mini lots, twice as big as the second trade!
Don’t forget we also have the rst two trades still running making us money!

The third trade gets placed, a er 7 days the pro t has already topped £1800 at this
point it would be worth considering to take pro ts on the last two trades.

Both of these alone will of netted you £5200 and this is without counting the rst
trade!

What I would suggest you to do is upon closing the nal two trades, keep the rst
trade running so if you see any more pins you can keep using the pro ts from the
rst trade to then scale in again, repeating the proceeds I’ve outlined above.

This method can be used on all time frames, the example above is best suited to a
longer term trader such as someone using the daily chart, a day trader could see a
trending movement on the 5 minute chart and scale in, in the exact way described
above, there really are endless variations you can come up with when implementing
this method.

Why Having Multiple Positions Gives You

More Freedom
 

One other bene t of scaling in is it gives you the ability to play around with your
trading methods a bit.
Even if you only have one trade placed in a trending movement the possibilities it
will open up to you are endless, for example, instead of placing your second trade at
a higher leverage than your rst why not place it at the same amount?

Think about it

Instead of having two trades placed, one big and one small, you can have lots of small

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trades all running at the same time.

If you place ten trades at the lowest leverage available that’s basically the equivalent
of having one 10 lot position running anyway.

This gives you more freedom because the individual risk on each one of these 1 lot
trades is still really small yet your making equivalent pro ts to that of a single 10 lot
trade!

Another bene t to having multiple trades running at once is the e ect it has on your
psychology.

I think most traders trade in a way where, they place one trade then, wait for the
outcome before placing another trade, usually the thought never occurs to them to
place more trades, their eyes will be glued to the screen watching the market to make
sure they don’t lose on the current trade.

If you’re in a winning trade you should be placing more trades onto that same
currency in the same direction, you can use the pro ts you’ve taken so far to increase
the size of the stop-loss on the new trade, so although another setup you use may not
appear in the market you can still place a trade based on something else just to get
another trade placed.

Summary
 
 Turning a small account into a big one is no easy feat to accomplish, there usually
aren’t many opportunities to scale into trades like I’ve shown you in this article
however ,I’ve developed and re ned one more technique you can use to build your
account up.

This method does not require you to have much money in your account nor does it
need you to place many trades, all it takes is you to be able win on two trades in a row

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in order for it to be successful.

To nd out more about this method click here

(https://www.forexmentoronline.com/turning-a-small-account-into-a-big-one-part-
2/).

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Comments
huis huren says
FEBRUARY 4, 2016 AT 8:21 AM (HTTPS://WWW.FOREXMENTORONLINE.COM/TURNING-A-SMALL-ACCOUNT-INTO-A-BIG-ONE-
PART-1/#COMMENT-44)

I see your site is very great to me! We have hope that u can keep up this pretty work. Will u please also
visit our page ?

REPLY

kelvin McMurtry says

JULY 5, 2016 AT 1:23 AM (HTTPS://WWW.FOREXMENTORONLINE.COM/TURNING-A-SMALL-ACCOUNT-INTO-A-BIG-ONE-PART-
1/#COMMENT-845)

how come your stop losses is 10 pips away from your entry but all my stop loses is 80 pips or more . it
doesn’t matter what pattern appears my stop losses seem to be 80 or more pips and never less than 80 ?

REPLY

Anonymous says
NOVEMBER 6, 2017 AT 10:10 PM (HTTPS://WWW.FOREXMENTORONLINE.COM/TURNING-A-SMALL-ACCOUNT-INTO-A-BIG-ONE-
PART-1/#COMMENT-3796)

A 1000 lot position is £10000 each pip, not each 100. pips.
REPLY

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