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How to Get More Pips in Forex Trading
The topic of this post is: How to get more pips in forex trading.
If you’re keen to know how to get more pips in forex trading, the best way is to make small changes to an already profitable trading strategy. But what if you don’t have an already profitable trading strategy?
How to get more pips in forex trading: Strategy matters
The goal of forex trading is to win more than you lose.
Sounds simple, right?
It can be difficult finding a winning forex strategy when you start. But the best way to find a strategy is to analyse your past forex trades. Looking at your trading history will make it easy to evaluate which parts of your trading system can be improved.
That’s the key.
Find out what you’re doing right and wrong.
AND why the profitable trades are profitable…
This takes time.
You need to test some strategies to find what works and what doesn’t.
Trading with the same system consistently can be highly effective. But just because your trading method is profitable doesn’t mean that it can’t be improved. Remember, the forex market is constantly changing.
It’s rare that one strategy will work all the time…
How to get more pips in forex trading: Improving your strategy
Your trading strategy should be updated regularly.
But what changes should you make?
Well, this depends on your strategy.
Here are some helpful hints with regard to how to get more pips in forex trading:
- Start trading with limit orders,
- Play with your stop-loss levels, and
- Increase your profit targets.
Let’s go into each of these points in more detail…
Most forex traders use market orders to open positions. That means most forex traders pay the current market price, which could be anything.
You probably know where we’re going with this…
If you trade with market orders, you risk paying more for the trade. For example, assuming there’s breaking news and a forex pair’s price moves quickly, you won’t know what price you will receive if you’re trading with market orders. You will just receive the ‘market price’ and that could be any price!
The forex market is always moving.
That’s why you should always trade with limit orders.
When you trade with limit orders, you will know what price you’re buying and selling at.
You can either put a limit order in for the current market price or, instead, place a buy limit order in a few ticks below the market price. If the price drops, you enter the market in a more favourable position, which is great.
If the price doesn’t fall to your order limit, don’t worry about it. Just look for the next trading opportunity. Remember, the forex market has a never-ending supply of trading opportunities. If you miss out on one opportunity, just look for the next one.
Limit orders in the real world
We suggest trying this method out for yourself.
Look for good entry points and set your limit order three to five pips below the market price. Although three to five pips doesn’t sound like much, small gains add up. If you made 500 winning trades a year and added three pips to each win, that’s an extra 1,500 pips of profit!
And if you’re wondering, we recommend selling with limit orders as well. That way, you will know what price you’re going to receive. Remember, if you used market orders to sell, the market might execute your order lower than the current market price – especially when the forex market is volatile.
Bottom line: It’s a no-brainer to trade forex with limit orders if you want to learn how to get more pips in forex trading.
Now let’s talk about stop-losses. Experimenting with your stops is an easy way to get more pips in forex trading. Here, again, you should analyse your past forex trades. That way, you can find out whether you need to tighten (decrease) or widen (increase) your stop-losses.
Tightening your stop level
Most trading systems use the last swing low as a stop level.
For example, imagine an uptrend with both highs and lows. The last low in the uptrend would be considered the ‘swing low’. If the market price falls below the ‘swing low’, it would trigger your stop-loss.
Most trading systems use the same stop-loss methods.
So why do the same as everyone else?
You should consider having tighter stops…
Having ‘tighter’ stop-losses will potentially save you a few pips every time you have a losing trade. Remember, minimising your losses is the way to successful forex trading. We always recommend cutting your losers quicker and letting your winners run for longer.
The best traders we know cut their losers quickly.
That allows them to focus on the forex trades that can make money.
Widen your stop-loss
On the flip side, if you find yourself getting stopped out too soon, you may need to widen your stops. Here, again, we recommend that you analyse your trading history in more detail.
If you feel frustrated that you’re constantly getting stopped out of good trades, that might be a sign that your stops are too tight. For example, you might be using a 30-pip stop-loss when you could be using a stop level of 10 pips and getting better results.
It’s difficult to know whether to widen your stop-losses.
If you lose more, you have to win more to make back that money.
But it really depends on your strategy.
If you’re trading medium-term fundamentals, for example, you may want to widen your stop to give the trade more time to work out. But if you’re trading technical set-ups, widening your stop-loss could turn out to be a disaster.
Remember, the best way to learn how to get more pips in forex trading is analysing your past forex trades and figuring out what you’re doing right and wrong.
Perhaps the most crucial part of your strategy is deciding when to exit the market.
Put simply, it’s great making money…
But you might be leaving profit on the table by exiting trades too early.
Maybe you’re setting your ‘take profit’ target at 40 pips when you should really be selling half at that level. You could leave the rest of your position to run to another target. Remember, you can’t go broke taking a profit…but you might be leaving a house or car on the table if you’re taking profits too early all the time.
Your ‘Start With Forex’ Takeaway: How to get more pips in forex trading
To summarise, the best way to get more pips in forex trading is to analyse your trading history and make small changes. Analysis of your previous trades can help you see which changes may improve your profits.
Ask yourself the following:
- Am I taking profits too early?
- Can I lower or increase my stop-loss?
- Am I entering the market too early?
Be honest with yourself…
Making small tweaks to your trading style could increase your profit margins.
It’s that simple.
Your ‘Start With Forex’ Takeaway: If your strategy is already profitable, you don’t need to make massive changes. Focus on what you’re doing well and do more of that. If you aren’t profitable yet, analyse your past trades and try to figure out what you’re doing right and wrong in order to get more pips in forex trading.
Making small yet effective changes, gaining just a small number of extra pips per trade, will have a significant impact on your long-term gains.
If you want to learn how to trade forex like a professional, start by reading our FREE forex course. Remember, there’s a million ways to make a million bucks in the forex markets. So if you want a head start in forex trading, alongside our free course, check out our approved products page for forex trading signals and systems to help kick start your trading.
To your trading success,
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