Trading is one of the hardest tasks every new trader should be concerned about. You need to have enough capital to start a good trading journey but not everyone can start their trading with a big account. However, it’s not compulsory to start trading in a big account. You can even trade with a small account. But dealing with the small account is a little complex and many naïve traders often become frustrated with the small profit factors. They think it is the key reason why they are always losing money and failing to control their emotions.
Don’t assume that trading in a small account is a disadvantage. If you can use strategies and skills in the Forex market, you can make huge profits in a small account. In this article, you will find some tips which will help you to grow with a small account.
Don’t increase your position size often
You can change your position size as per your need but it is better not to change the position size unnecessarily. Many new traders change their position size in order to make more money and thus end up losing their money. You must learn to control greed in trading or else you are just gambling with your investment.
Don’t let your emotions come into a trade, you can increase your position size slowly and in a disciplined manner. To increase your position size, you first need to have many winning trades for at least a month.
Don’t compare your trades with others
Everyone is different and so does their trading style. You can’t have all the skills like others nor do they will have the skills which you have. So it’s totally meaningless if you compare your skills with others to try to gather more knowledge instead of comparing. Even the top analyst at Saxo markets have different levels of skills and expertise. It’s a very big mistake to compare one person with another, especially in the investment industry.
New traders often compare their trades with the pro traders and soon they lose hope as they don’t find themselves making profits like pro traders. In the Forex market, you need to work really hard to take a position like pro traders. They achieve success through their hard work and patience.
Risk the amount which you can afford to lose
One of the major mistakes new traders make is to start taking more risks in a small account and soon they find themselves without any money. You should clearly have an idea of what percentage you can risk in a small account. Though the risk tolerance level greatly depends on a trader’s personality, you should still limit the risk by using the 4% rule of money management. Regardless of your trade setup, stop risking more than 4% in any trade. Learn to play it safe and you will be able to earn more money.
As a new trader before you trade with a risk, you should focus on the development of your trading strategies to trade profitably. The more risk you take, the more fear you will have of trading. So, never forget to take risks that are in proportion to your account size.
Always prepare yourself to face the ups and downs of the Forex market. There will be a certain time when you notice your trades are winning for a week and later on you may also find yourself losing on many trades constantly. Be mentally prepared to deal with such issues.
Pro traders always try to learn from their mistakes. You should also rectify your mistakes. They try to maintain a good trading plan to trade in a small account. It will be helpful for you to trade in a small account if you can maintain a trading plan.