Can you double your forex account daily? Approach this with extreme caution!
BY Chris Andreou
|February 7, 2022If you are remotely considering to double your forex account daily, I would advise you to proceed with extreme caution. With that said, it is possible to double your forex account in a day, but trying to double your forex account daily will eventually lead to ruin.
Some money management strategies are just not worth pursuing.
To make things clearer, I will be sharing my opinion on the matter in more detail. Then you can decide whether this is an approach to trading you can afford to take.
This article will explain how it is possible to double your forex account in a day, or in a single trade. Also, it will clarify why trying to double your forex account daily is a high risk, unsustainable strategy that will lead to ruin.
Keep reading if you are interested to learn more.
Let’s get started.
Can you double your forex account daily?
It is necessary to have a set process and rules for your trading. Forex money management is an important component of that and arguably, holds the key to your success. This is what can make or break a forex trading strategy and you will discover why in just a moment.
In the absence of sound money and risk management rules, you might end up making decisions which don’t contribute to your long term survival in the markets. The desire to get rich quick or to make as much as possible in the shortest period of time motivates traders to attempt flipping their accounts.
This article is as much about trading with sound money and risk management rules as it is with attempting to double your forex account daily. They are not mutually exclusive; they go together hand in hand. But you are probably reading this to get a simple strategy so you can learn how to double your forex account daily.
The way to double your forex account is pretty simple; it only requires some basic knowledge about risk vs reward. Then scaling that basic knowledge up so the math makes sense for you to double, triple or even quadruple your forex account in a day.
I am going to show you how it can be done, and then I will explain why trying to double your forex account daily is a recipe for disaster.
Trying to double your forex account in a day is a high risk strategy
If you’re trying to double your forex account daily or in a day, you’re taking on a high risk strategy. Apart from finding adequate opportunities to do it every day, there may also be leverage restrictions preventing you from trading large enough lot sizes.
With that said, I will not be covering any entry or exit triggers here. In other words, there won’t be any patterns or signals that would indicate when to buy or sell. This demonstration will just use math to answer the question, and the math is very simple.
Let’s look at some ways that you could double your forex account.
Examples that could double your forex account
The first way is to look for a single opportunity to risk your entire account and aim for an equivalent reward. A simple 1:1 risk to reward trade over any specified number of pips could double your forex account in a single trade.
For example, by risking 50 pips to try to gain 50 pips, where the 50 pips at risk is the equivalent to the value of the account and the 50 pip reward would mean doubling the account.
For the first example, you would divide the balance of your account by 50 pips, to get a value per pip. Let’s says you have a $500 account, so the value of each pip must be $500 / 50 pips = $10 per pip. $10 per pip is the equivalent to trading one standard lot in forex and it is possible to do with this account size with at least, 1:200 leverage.
That level of leverage isn’t available to everybody and in reality; some of the account will be used as margin to open the deal. With that, there will be a margin stop out level too. Usually, this is set at 30% of the used margin by the broker, so you wouldn’t be able to use all of your account as risk. The result would be a trade with a risk to reward ratio of less than 1:1. Since the deal would be stopped out before 50 pips of adverse price movement is reached.
Regardless, this would still double the account if the 50 pip profit target was reached.
How to double your forex account
Let’s change some of the variables and look at another example.
For the second example, I am going to stay with the 50 pips risk but double the profit target to 100 pips. This just changes the risk to reward ratio of the trade to 1:2.
Most currency pairs have an average daily price range of 100 pips, so it is still possible to capture this many pips in a day. But for this example, the amount of risk can be halved to 50% of the account, because twice that in profit is the equivalent to doubling the account. Although this is much more challenging to achieve than the previous example, it’s still doable. Furthermore, you have at least twice as many attempts as the previous example to try and double the account.
Similarly for this one, divide the account by two then use that amount as risk. For a $500 account, the amount to risk will be $250 distributed over 50 pips. So $250 / 50 pips = $5 per pip or 0.5 lots to trade. If the market moves in the opposite direction and stops you out of the trade at 50 pips, that’s a $250 loss. However, if the price moves 100 pips in the direction of the trade, then the reward will be $500.
You would still need 1:200 leverage to trade this lot size on such a small account balance. But the risk to reward ratio is truer than the previous example. Because the other 50% of the account, is not being used as risk, that will include the used margin and the margin stop out level.
How much do you value your money?
There probably have always been people who have tried to double their money in a day trading forex. The odds of success are extremely low, but not zero, because it is mathematically possible to do.
You just need to risk all of the account in a single trade and seek an equivalent reward. Risking half of the account, seeking twice the potential reward will also do it.
However, no trading strategy independent of the risk management component ever works 100% of the time. Every trading strategy incurs losses from time to time. The thing is the distribution of the winners versus the losers is of a random nature. You don’t know whether the next trade is going to be a winner or a loser.
If you try to double your forex account daily, you might have a winning streak and manage to do it a few days in a row. But if you continue to compound the profits the inevitable losing streak will happen, resulting in the eventual and total loss of the account.
Most forex traders who try to double their accounts every day or in a day have only calculated how quickly they could make money. When they try it and if it works once, they will try it again and again until their account is ruined. Doubling your forex account in a day is possible but it is unsustainable to expect to do it daily. If you do manage to do it even once, it is more to do with luck than it is to do with skill.
Have realistic expectations
Just because you can double your forex account in a day, it doesn’t mean you should. Instead, you should have realistic expectations and try to grow your account in a sustainable way.
The conventional wisdom within the trading community says that you should only risk a small percentage of your account on any trade idea. This is not without reason, it is timely and prudent advice that has stood the test of time.
Furthermore, some circles also believe that the more currency pairs you trade, the more opportunities you have to make higher returns. There is some truth to this, but I am going to show you how you can realistically double your forex account trading just one currency pair. This approach is more realistic and assumes much less risk than the previous examples.
A lower risk approach to double your forex account
The below example is for illustrative purposes only using hypothetical data.
Let’s assume that you focus on one currency pair, and aim for a small but conservative average weekly gain of 2.5% or 10% per month. To achieve this, you could risk 1% of the forex account daily and aim for a 1% daily reward. Alternatively, you can make two trades per week, risking only 1% on each trade with a combined potential reward of 2.5%. Compounding the returns monthly would double your forex account by the end of the 8th month.
This doesn’t take in to account losing months, as you will probably have them. However, this is what can be achieved with low risk, having conservative goals and focusing on just one currency pair.
Your results will vary depending on skill and experience and the average person doesn’t make any money trading forex. If you can make and keep just 1% of your account per month, you will be doing better than most market participants. Even if you achieve a 1% return at the end of the year, it’s better than losing 100% in a matter of days.
Conclusion
The short answer is that it’s possible but highly improbable to double your forex account daily. The long answer is that it depends on a lot of things including skill, experience, trading conditions and luck.
There are opportunities to trade where you could double your forex account in a day but it can just as easily lead to ruin. True sustainable growth takes longer than a day. It takes time for the money to accrue and for the account balance to grow.
One of the biggest mistake you can make in trading is to have unrealistic expectations and bet against the odds. If you want to survive and thrive in the Forex market, you need to be realistic. You have to accept the fact that there will be losing trades and you don’t know when they will occur.
Forex is not a get-rich-quick scheme; it should be treated as a business. Once you appreciate and understand that, you will be on the right track towards making real progress.
For this reason, it is best to only risk a small percentage of your account on any trade idea and following a well thought out trading plan that takes losers in to account.
But at the end of the day, you can trade however you like; it’s your money and your decision. But I hope that after reading this, you proceed with your eyes wide open.
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