How to boost your income from trading

Automate your trading strategy, expand to different markets and asset classes, and modify your risk appetite to maximise profits

Start writing a journal to keep track of all your trades. See what worked, what didn’t and why. Getty Images

If you’re wondering how to increase your profits from trading or how to add extra percentage on your equity, you’re not alone.

First, we need to assume you’re already making profits from trading in the markets. That’s important because “how to promote trading income growth” and “how to get income from trading” are two different things. So, we’re assuming that you already have an income from trading and this income is not negative.

Luckily for you, the part about increasing income is easier than actually learning how to make money in the first place. Watch out, though. It’s easier, but not easy overall. The key to increasing profits once you have profits is scale.

To grow any business, you need to focus on scale. In business, scaling is a specific process that involves people and technology.

Not entirely so in trading where you’re trading by yourself, which means you probably won’t employ a guy to trade with you. In trading, the technology part is more scalable.

If you have a strategy that can be automated, you can learn how to code and programme a trading robot (expert adviser) that will trade for you based on the parameters you provide. But you need a suitable strategy for that.

For example, if you’re using price action, which is more of a visual trading art as opposed to a mathematical system, then writing code for a robot may not be the best option.

On the other hand, if you’re trading based on indicators and oscillators, then coding your strategy into a programme can be an interesting option. Why? Because the programme will trade when you’re sleeping or out having a good time.

Normally, you would sit in front of the computer trading for 10 hours a day. An algorithm can trade 24/7. That’s scaling.

That’s just a side thought because I understand that not everybody is willing to learn programming to increase profits. Also, as I mentioned, sometimes your trading strategy will be impossible to code. What can you do in that case? The first tip is to expand to different markets and types of assets.

Say you have a working strategy and you’re trading on the Dubai stock exchange. You earn money on local stocks, but why don’t you move to other markets?

On trading platforms online, you have access to all major exchanges in the world. You can trade stocks directly or through contracts for differences. You can trade stocks in the US, UK or Germany.

Again, say you were trading four to five companies on the Dubai Financial Market, why not add three more from Nasdaq, one from Amsterdam and another from London? Instantly, your exposure is twice as big, meaning potentially bigger profits.

If you’re only trading stocks, why not move to other types of assets like currencies or commodities? In addition to stocks, you could trade the dollar, euro and yen. Also, gold, oil and platinum. More opportunities, more potentially winning trades.

Yet another way is to modify your risk and money management. If you’re currently very conservative and risk only 2 per cent of your capital on one trade, then maybe you can move to 3 per cent or 5 per cent. Don’t do that in every trade, but only in those you are most confident about.

Risk and money management are crucial and it’s good when you have strict rules in place, but sometimes you can adjust them to maximise profits.

Lastly, do you have a trading journal? If not, then start writing one, even if you already have some experience. Keep track of all your trades. See what worked, what didn’t and why.

Write everything down: emotions associated with training and circumstances. After making about 50 to 100 trades, analyse everything and see what factors were common in all working trades and what were similar in all losing trades.

You’ll be able to gather interesting findings, which will significantly improve your trading game. Analyse the data and search for weak and strong points. Then eliminate or limit the weak links and embrace the positive factors. Only good things can come from doing so.

Tomasz Wisniewski is director of research and education at Axiory Intelligence.