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How to Increase Your Trading Position Size – Tips and Strategies

  • 6 mins read ●
  • Last Updated:
position size in trading
KEY POINTS
  • Scaling up a position size is arguably among the most challenging parts of a trading career.
  • Due to psychological aspects, and the increasing risk associated with increasing trading volumes, many traders fail to increase their position size successfully.
  • Yet, several effective and practical techniques and approaches can help traders safely scale their trading position size.

The road to a successful trading career is different for everyone, yet there’s one thing that every trader must face at some point – to scale up position size. And that is among the most challenging, nerve-wracking steps many traders (including myself) struggle with. 

So, if you are facing this situation and looking for the right way to increase trading position size, then some effective techniques can help to achieve this goal. In this post, we’ll explore some of those.

Why Do Traders Struggle to Increase Trading Volume Size?

Many traders struggle with increasing their position size once they are able to generate consistent profits with small account size. The reason is primarily due to the psychological aspect of increasing the risk and dealing with a higher loss. Additionally, many traders are afraid of losing some of the capital they have already earned. 

For example, let’s assume you trade FX currency pairs with a lot size of 0.1, and you have successfully managed to make profits on a daily or weekly basis. Everything works well for you, and you feel comfortable with the position sizing you take every time you enter a position. However, your ultimate goal is to trade for a living, and to do that, you must increase your position size to a lot size of 0.5 or higher. 

Now, your trade risk and your account risk are no longer the same. Every time you enter a position with a lot size of 0.5, you feel pressure and anxiety. The way you have traded before has now changed, as losing your profits is becoming your main concern. After the first few trades, you get into a trading tilt, or the cycle of doom, and then you go back to your normal trade size to regain confidence. 

It happens to the best traders. The failure to increase a position size can be a frustrating process that may lead to a losing streak and sometimes even to the end of a trading career. 

Furthermore, as part of the process of increasing the position sizing, many also fail to identify the proper position size for their trading needs. In fact, determining position size to maximize returns is a huge challenge, even for the most experienced traders, that largely depends on the particular investment size you want to take. For that matter, in case you are trading forex or commodities, a great tool to calculate your position size for a single trade is to use our lot size calculator. The process is simpler if you are trading stocks, as you’ll have to increase the number of shares of the underlying asset you buy or sell. 

Fortunately, there are some ways to help you scale up your position size without getting into a bad trading period. Below, we’ll suggest some techniques that might help you change your trading position sizes.

4 Ways to Increase Your Position Size

Here are some effective ways to help you increase your position size safely:

1. Use the 5-3-1 Trading Strategy

An excellent method to increase your position trading size is to use the 5-3-1 trading strategy. Essentially, this strategy involves trading on five currency pairs, with three trading strategies and one trade a day. However, you can tweak things so that the 5-3-1 can help you increase your trading volume smoothly. 

Using the 5-3-1 trading strategy can help you make the transition from a smaller to a larger position size in a less stressful trading environment. By taking just one position in a day, you can smoothly get used to the new position size without focusing on your trading account balance.

2. Focus on Win/Loss Rate, Not the Account Balance

When you are in the process of increasing your trading volume size, you must focus on the win/loss rate or the risk percentage per trade rather than your account balance. Remember, if you aim to increase your position size, then you most likely do that following a period during which you have successfully managed to generate consistent daily profits.

This means you have developed a successful strategy, and your only goal is to continue with the same approach and the same logic but with a higher position size. One excellent way to do that is to use a trading journal template to record all your trades.

3. Trade Large and Small Positions Size Simultaneously

Another way to safely increase your trading volume is by simultaneously trading large and small positions. For example, let’s assume you take ten trades a day. So, you can continue to take five trades in a day with a small position size and the other five with a larger position size. To do that, it is recommended to use a trading journal where you can record all your trades.

This method can help you to gradually increase your position size while maintaining the confidence you need to continue trading profitably. Unlike other techniques, with this approach, you are not taking the maximum risk; instead, you are trying to spot the correct position size for each particular trade you want to make.

4. Adopt the Go Big or Go Home Mindset

Finally, even though most trading mentors claim that the best way is to increase your position size incrementally, my experience tells me something else. Many traders feel more comfortable doing it without overthinking. If you know you are a profitable trader, then there’s no reason why you should not make money with a larger position size. 

These traders, unlike others, believe that they have one shot to succeed in trading, and now it’s time. Therefore, they increase the position size and don’t look back. Remember that in most cases, a trading career is short, usually with a 5-10-year span. As such, you do not get many opportunities to make it in this business. 

So, based on this theory, if you have enough trading capital in your account, a good trading strategy (especially if it relies on technical analysis), and the right mentality to succeed as a trader, then you’ll be able to increase your trading volume size without any major issues, even if it might take some time and a short period of losing some of your profits.

Final Word

To sum up, increasing your position size can be a challenging and nerve-wracking step before you achieve your ultimate goal. Frankly, there are no guarantees for you to succeed in increasing your trading volume. Many traders fail to do that, and it’s arguably among the most challenging parts of a trading career. 

Yet, if you plan to build a career as a trader, you must go through this process, find a proper position sizing, and apply risk management tools to trade for a living. To get there, use the tips and strategies mentioned above, and if needed, you can join our trading academy, where you can also discuss with our trading coaches to get more ideas on how to increase your trading position size.


Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.

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