Last Updated on March 4, 2025
“Measure twice, cut once,” goes a traditional proverb that rings loud in the context of funded trader scaling strategies. One of the crucial yet often underestimated skills distinguishing the best traders from the rest is their ability to properly scale their trades, manage their buying power per trade, and balance their open positions. Think of scaling up in trading as climbing a mountain – every step must be calculated, every foothold secure, and every move intentional.
This guide will take you through practical techniques to responsibly increase position sizes and leverage greater capital, all while managing risks and adhering to the funding program’s rules. Whether you’re a novice funded trader or an experienced market player, these strategies will help you scale effectively and sustainably.
Understand the Rules of Your Funded Trader Program
In the context of funded trading accounts, increasing your buying power comes with a unique set of challenges and responsibilities. Unlike trading with personal capital, you’re bound by specific program rules designed to protect the firm’s capital while providing you with an opportunity to grow.
Every funded trader account program comes with its own set of rules, and you can’t scale successfully without knowing and adhering to them. At Earn2Trade, we have tried to simplify them as much as possible. For example, the most important parameters that you should take into account while being enrolled in The Gauntlet Mini™ or the Trader Career Path® programs include:
- Daily Loss Limits: The maximum amount you can lose in a day.
- Profit Goal: The amount of money you need to grow your account balance to pass the program.
- Maximum Drawdown: The total allowable amount for your account to go below its highest balance.
- Position Size Limits: Restrictions on the number of contracts you can have open at any given time across all positions.
However, it is also important to keep track of other requirements, such as a program’s progression ladder and guidelines for how and when you can increase your buying power, approved trading time specifics, and more.
These rules exist to protect both you and the capital provider. They create a framework within which you must operate to avoid account suspension or loss of funding. Without a clear understanding of these guidelines, scaling becomes a game of chance rather than a strategic move.
Scaling as a Risk Management Technique
Let’s start with an example to showcase how vital proper risk management is. Imagine you’re trading the GAU50 and holding a $50,000 funded account with a daily loss limit of $1,100. If you open a position size that risks $600 per trade and encounter two consecutive losses, you’ve already breached your allowable loss for the day. Instead, by risking $200 per trade, you’d maintain more flexibility to recover losses while staying compliant with program rules.
As you increase position sizes, the stakes grow exponentially, and so does the loss potential. Effective risk management ensures you can weather market fluctuations without jeopardizing your funded account. To do that, consider applying some of the following techniques:
- Fixed Percentage Risk: Risk a consistent percentage of your account equity per trade (e.g., 1-2%). This ensures that even as your account grows, your risk remains proportional.
- Dynamic Position Sizing: Adjust position sizes based on market conditions and volatility. For instance, in highly volatile markets, reduce position sizes to minimize exposure.
- Diversify Trades: Spread your risk across multiple instruments to avoid overexposure to a single asset class or market event.
The idea of diversification is especially important. To help you on that front, we have created a dedicated guide explaining the 6 most crucial diversification strategies you should know.
Position size calculators are great tools to ensure precision in risk allocation. They automatically calculate the appropriate lot size or number of contracts based on your account size, risk percentage, and stop-loss distance.
Also, don’t forget to use Earn2Trade’s dashboards to track your real-time performance metrics and prevent violations.
Leverage Incremental Scaling
The incremental scaling approach involves increasing your position sizes step by step, ensuring stability and consistency at each level before advancing further. Think of it in the context of climbing a ladder – you don’t skip rungs; you ascend gradually, testing your footing at each step.
Crucial to mastering this is self-control. To help traders in this, we have introduced the Progression Ladder rule, which limits the number of contracts that traders can open at particular stages. However, as they profit and increase their account balance, they are allowed to open more positions to take advantage of their additional capital (although it isn’t mandatory). Furthermore, to help you stay on track and learn continuously, we’ve ensured that not complying with the progression ladder rule will block the evaluation account for the day but won’t require the account to be reset.
We have also ensured that our programs allow for growth based on performance. Take advantage of that and use the scaling plans to understand when you’re eligible for increased buying power and how to adjust your strategy accordingly.
Other useful strategies to leverage incremental scaling include:
- Setting Milestones: Define specific performance benchmarks that signal readiness to scale. For example, achieving a 10% account growth while maintaining a win rate above 50%.
- Start Small: Begin by increasing position sizes incrementally. For instance, if you’re trading one contract, move to 1.5 contracts rather than doubling to two.
- Reassess Frequently: After each scale-up, review performance metrics to ensure that your strategy remains effective at the new level. Track your progress using a detailed trading journal and document each scale-up decision, including the rationale and outcomes, to refine your approach over time.
Utilize Compounding to Amplify Growth
Benjamin Graham, the father of value investing, once said,
The magic of compounding returns is the biggest mathematical discovery of all time.
Who are we to argue?
Compounding, in the context of funded trading accounts, is a powerful tool that can exponentially grow your capital over time. By reinvesting a portion of your profits into larger positions, you can leverage your gains to scale responsibly.
If you decide to reinvest parts of your profits, it is essential to maintain proportional risk. As your account grows, continue risking the same percentage of equity per trade. This ensures that losses remain manageable even as position sizes increase.
Also, ensure that you monitor your performance regularly to identify patterns in a timely manner and adjust your compounding strategy as needed.
However, it is advisable to avoid overcompounding during drawdowns – instead, scale back to previous position sizes until you regain profitability and confidence.
At Earn2Trade, we believe that promising traders can guarantee sustainable performance instead of progressing based on one-off trades. To eliminate the “luck” factor in traders’ performance, we have introduced the “Maintain Consistency” rule, stating that over the course of your examination, no single trading day can account for 30% or more of your total PnL.
While it might not seem convenient for you, just trust us – learning to comply with it will make you a better trader in the long term and teach you to prioritize compounding profits instead of one-off wins.
Optimize Trade Selection by Prioritizing Quality Over Quantity
Scaling is not just about increasing position sizes; it’s also about improving the quality of your trades. Focusing on high-probability setups ensures that you’re scaling into trades that are less likely to cause any account disruptions while allowing you to advance steadily on your funded trader journey.
So, the million-dollar question is – how do we identify those high-probability trades? A good starting point is using backtesting and historical analysis to validate the different setups and prepare for what to look for in the market. You can also maintain a watchlist of instruments that align with your strategy. This reduces the time spent searching for setups and allows you to focus on quality opportunities.
Also, ensure you can filter the market noise properly and avoid overtrading by sticking to predefined criteria for entering trades.
Use advanced analytics, such as order flow data and sentiment analysis, to confirm trade setups. Pair those with your traditional technical and fundamental analysis research tools, and you will get a more complete picture of the market. As a result, you will be able to make more informed decisions.
Earn2Trade’s simulated accounts are an excellent tool for testing your strategies and refining your trade selection before scaling up in live environments.
Consider Employing Risk-Off Days and Strategic Pauses
Every trader faces moments when stepping back is the wisest move. The question is how to recognize them. A few signs to look out for include:
- Emotional Trading: If you find yourself trading impulsively or out of frustration, it’s time to step back and reset.
- A Sufficient Loss or Win: Either can throw you out of your way by making you either greedy or scared, trying to overcompensate for accumulated losses or build upon steady wins. However, this rarely pans out successfully.
- Consistent Losses: A streak of losses can signal the need to reevaluate your strategy before continuing.
- Market Volatility: When the market becomes erratic, taking a risk-off day can help protect your account.
- Fatigue or Burnout: Trading requires mental clarity. If you’re feeling tired or overwhelmed, a break can improve focus and decision-making.
- Hitting Profit Targets: When you’ve reached your daily or weekly goals, stepping away helps lock in gains and prevent unnecessary risks.
By recognizing these signs early, you can pause, reassess, and return to the market with a fresh perspective and a more assertive strategy, preserving your performance.
Taking a “risk-off” day doesn’t mean you should just sit tight and wait for it to pass. We suggest you either use it to relax and recharge (doing mindfulness training, physical activity, or going out in nature, for example) or focus on education and self-reflection, where you analyze past trades, read market forecasts, or refine your trading plan.
Make sure that you don’t underestimate the importance of risk-off days. Think of them as the halftime in a sports game – they give you a chance to regroup, strategize, and return stronger for the second half.
Stay Agile and Timely Adapt to Changing Market Conditions
Markets are dynamic, and scaling strategies must adapt accordingly. Flexibility is key to navigating varying conditions, from trending markets to range-bound or volatile environments. So, here are a few potential scenarios that you might consider testing out:
- Trending Markets: Scale with the trend but use trailing stops to lock in profits.
- Range-Bound Markets: Focus on smaller positions and quicker exits to capture short-term moves.
- High Volatility: Reduce position sizes to minimize risk during unpredictable periods.
However, don’t treat every situation “as-is.” Instead, make sure to acknowledge any individual circumstances or factors that might be behind the unfolding market events. For example, in a trending market, you might consider gradually adding to a winning position as the trend strengthens, using tight stops to protect gains.
Also, make sure to stay informed about macroeconomic events and news that can influence market behavior. Tools like economic calendars and real-time news feeds are invaluable.
Leverage Advanced Technology For Scaling
Technology is a trader’s ally, especially when scaling. Automation and advanced analytics can streamline processes and enhance decision-making. A few tools that can help you on that front include:
- A powerful, secure, and high-performing trading platform
- Rich and reliable live data feeds
- Risk management, charting, and backtesting tools
- Journaling and analytics software
- Your funded trading platform’s dashboard
For a complete list and detailed advice on finding the right tools for your needs, check out our dedicated guide.
Scaling Done Right Can Make You Our Next Funded Trader Success Story
Scaling in funded accounts is both an art and a science. It requires discipline, strategy, and a deep understanding of your funded program’s rules. By mastering risk management, leveraging incremental scaling, and adapting to market conditions, you can unlock greater buying power without compromising your account’s longevity.
Remember, scaling is not about chasing bigger profits; it’s about building a sustainable foundation for growth. Think of incremental scaling in the context of training for a marathon – you start with shorter runs, gradually increasing distance and intensity as your endurance builds. Follow this advice, and you can become our next success story.
