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Whether you are a day trader or a long-term trader, the goal is the same. You want to grow your capital by making sure that your profits outweigh your losses in buying and selling financial instruments. 

If done correctly, taking advantage of small price moves can be lucrative, but it can also be dangerous especially for traders and newbies who do not have smart trading strategies. In this article, you will discover smart trading strategies you can start using to help you grow your capital in a short time. 

Choose Your Trading Style And Get Good At It

If you want to make a profit in Forex trading, the first step is to choose a trading style that suits your personality and goals. There are several trading options, they include:

Day trading

- Scalping
- Swing trading
- Long-term trading

The difference between those trading styles is the timeframe. With scalping, you can open and close trading positions within 5-25-minutes, while day trading involves closing all active trades before the end of every business day. Swing trading is when as a trader, you keep your positions open between several days to several weeks. As the name implies, long-term trading involves trades that last between several weeks to months.


What Strategy Works Best for You?

After determining your trading style, you need to know what strategy works best for you. Some traders find it easy to understand technical indicators like Bollinger bands, moving averages, Fibonacci, Relative Strength Index, Stochastic, and other technical indicators, while some other traders prefer and find focusing on economic news and other fundamentals easy. 


The professionals behind UseThinkScript.com say that whatever works for you is what you should stick to. And no matter what the indicator or strategy is, you should be looking to learn more. Although it is a smart choice to mix these strategies if you can.



Set Your Risk/Reward Ratio To 1:2 Or Higher

As a trader, there is no guarantee that you can achieve over 50% of winning trades. However, when you set your risk/reward ratio to 1:2 or higher, you may do so. For instance, if your target is to gain 200 pips on an open trade position, you may set your stop-loss at 100 pips of the current market price.

This can ensure your capital against loss by improving the odds of success in your favor and enable you to earn decent profits. 


Avoiding Using High Leverage

Experienced traders know too well that leverage is a double-edged sword. When you are just starting, we advise you to not over-leverage your trades, as this may amount to severe losses from which it may be very difficult to recover.

Imagine if the market goes against the opened position of a 400:1 leverage by 0.25%, in such case, the leverage may cause an entire wipeout which could make a trader lose his or her entire investment.

As a beginner, consider using 1:10 or a lower amount of leverage, to guard your capital against risks.


Set Realistic Profit Targets

As a trader, one way to profit consistently is to set realistic profit targets. Most financial instruments whether commodities or currency pairs have different average daily volatility. 

For example, if on average the EUR/CHF move by 50 to 75 pips. It may not be realistic to set a daily target at 150 pips for this currency pair. Make sure that your target commensurate and is realistic with the price action of the instrument you are trading.


Do Your Regular Fundamental Research 

Although this is last on the list here, it is not to be attended to last. If you want to achieve a consistently successful trading experience, you need to stay on top of the latest economic trends. Truly, it is difficult to keep track of news developing every minute of the day, however, as a trader who wants to grow his or her capital, you need to make a habit of keeping track of the news. 

For instance, at the beginning of 2020, the price of oil began its massive fall because of the pandemic, from $61 collapsing below $0 and nowadays trading near $60 and above. With fundamentals, you need to pay attention to the latest Gross Domestic Product (GDP), Consumer Price Index (CPI), Unemployment rate, and other important releases, as well as interest rate decisions.

Scan business news and visit reliable financial websites. Make a list of instruments you'd like to trade and keep yourself informed about the selected companies and general market movement. It won’t matter whether you are a beginner or a seasoned trader, these strategies will help you manage and grow your capital in a short period if you abide by them.


Tags: ThinkScript,UseThinkScript,Smart Trading,Stochastic,forextime,Consumer Price Index

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