How To Have An Impressive Forex Portfolio

One of the most common advice that you will receive as a novice Forex dealer is the advice that you need to start small when you begin to trade in Forex and that you should not trade more than 2% of your capital investment. By doing so this will allows you to gain confidences as your experiences built up. Even if you took some losses, the small losses will only affect you negligibly.

This is an excellent advice for the novice Forex trader as they limit the exposure to risk. However the very same advice will also limit a novice forex trader to expand their horizon. The word "small" is equated to "safe" and this will stop you actually from building up your confidence level. To be confident you will need something to show for it and it is extremely difficult to built up an impressive portfolio if you trading account has only $500 to show for it.

No one can achieve a higher confidence level just by theoretical studies. To boost your confidence level you will need to build up a "success" track record and as the success rate goes up so will your confidence level.

By limiting your trading activities, you are actually limiting your potential to earn more and higher profits. So to overcome that, you need to trade more with a higher exposure level. And to do that will require more than a $500 trading account. Most forex trading advisers recommended that to be professional traders, you need at least $100,000. So how would you go about that to reach that target?

Build up slowly

To get to the top from where you are now, requires effort. There is no quick fix to that barrier. The only solution is to keep making small trades that bear fruits. The focus is on fruitful trading and not on volume trading.

Diversify to other currency pairs

Another method to grow your Forex portfolio is to venture out into other currency pairs. Again, while it's a good idea to stick with one pair in the beginning, you're not likely to want to stay with that pair for your whole trading career. Doing so would limit not only your experience, but your profits, too. That's not to say you should start trading volatile exotic currencies, but adding one more stable currency pair can really help build your portfolio. Once you've got some good experience with those pairs, you can add another.

Trading with your own money

Sometimes because we wish to have additional capital to trade with, we try to borrow from friends or family members. This is a very unwise move as you might end up losing all those money that you borrowed. The reason is that borrowed money will cause you additional mental stress because of the fear of losing it. This will result in you curtailing your trading abilities which will ultimately result in losses. Therefore you are highly recommended to abstain from trading in borrowed money.

In short, to gain an portfolio to be proud off, you will need to trade more frequently, assume more calculated risks, increase the currencies pairs to be traded on whenever possible. By following these steps, you will slowly but surely be on your way towards building an impressive portfolio.

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