Small Profit FOREX Strategies

Trying to accumulate FOREX profit can seem like a difficult task at times. In the foreign exchange market, you can make FOREX profit from the daily fluctuations in exchange rates between currencies. Therefore, FOREX profit is the amount of profit that you can make on a FOREX trade in the currency market. With the high volatility of the market however, you never really know what to expect. The vast majority of traders do not make profits consistently and most lose money. Many traders employ long-term methods that usually involve larger trades. While you can get some big wins with those strategies, you also can experience big losses as well. Using smaller, more conservative strategies can actually help you in a number of ways. Here are some things that you need to know about small profit strategies for FOREX.

Scalping

One of the more popular methods to trade the FOREX market is called scalping. With scalping, you are trying to get in and out of the market quickly. A scalping method might only take a few minutes, or it could take as long as a few hours. The main idea behind scalping is that you are only aiming for a few pips here and there. 

Instead of going after one big winner of 100 pips, you go for several smaller trades that add up to the same amount. You could get five 20 pip trades and accomplish the same thing. With this strategy, it is not an "all or nothing" type of approach. You use a smaller lot size and you keep your stop loss pretty tight. Therefore, you can not lose very much of your account on a single trade. You are aiming for small profits and small losses as well. 

Using the proper money management allows you to stay in the game to trade another day. You will not have to worry about blowing out your account in a single trade. You will be able to sustain your trading and your profits. 

Small Pending Trades

Another common strategy is to use pending orders to accumulate small, steady winners. For example, if your broker allows you to hedge, you can do so with pending orders. Pull up a chart of your favorite currency pair to trade. Then place a buy order above the market price and a sell order below the market price. Then you can walk away and go do other things while the market moves. When it picks a direction, one of your orders will open up and there is a good chance that it will close in profit. 

When you use this strategy, shoot for a small take profit level such as 20 or 30 pips. Keep your stoploss at a close level to your opening price as well. Depending on where your stop-loss is set, adjust your lot size so that you are only risking 1 to 3% percent of your account on each trade. 

When you use small, conservative strategies, you will find that it is easier to maintain your success over a long period of time. You will not blow out your account and those small profits will start to add up. Even though they might seem like small profits, before long, you will have a much larger trading account. 

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