Most traders dream to grow a small trading account and get rich quickly.
In reality though, millions of retail traders get their shirts ripped off their backs.
Trading is hard, trading a small account is harder, almost impossible.
I said almost, because, you actually can grow a small trading account.
What It Takes To Grow A Small Trading Account – Ground Rules.
To grow a small account, you need two ingredients.
1. A strategy with a good risk-reward ratio.
You may be lucky with a dozen trades, but over hundreds of trades, luck won’t keep you alive.
You need a strategy for playing the game or you are just gambling.
And not just any strategy, a strategy that consistently provides a good risk, reward ratio.
That means in the long term, you should make money with your strategy because wins outweigh losses.
If you need the best day trading strategy for small accounts, use strategies built around candlestick patterns and chart patterns.
2. Military discipline to follow the strategy.
It is one thing to have a strategy, another to follow it.
Only discipline allows you to stick to the rules of a strategy.
Only discipline tames the emotions that ravage trading accounts.
Only discipline allows you to grow a small trading account.
There is no shortcut.
Matter of fact you won’t grow a trading account, small or big without discipline.
Discipline is the hardest area of trading to master because it involves a solid grasp of trading psychology.
The human mind is hard to tame, as you soon will find out (if you’ve not already), your mind often gravitates to habits contrary to your trading plan.
Discipline comes through practice over time – there is no shortcut.
If you don’t have these two ingredients, you will never grow a trading account.
What you need to grow a small forex trading account
Now to get us ready to trade, another couple of things to keep in mind.
Focus on the process not the dollar figure in your fantasies
What is trading if not entering and exiting trades?
That’s a process.
It may seem counterintuitive to not think about the money since we are talking about growing a trading account, but, remember you are paid when you enter the right trades, and exit at the right time.
By investing your energies in the process, you let your strategy – rather than your emotions – play out.
Have realistic expectations.
We are not trying to go from $10 to $1,000,000 in one day. Because you have a small account be comfortable with small profits and small losses. Trust the process and compounding to do their work.
Growing a small account requires an appreciation of risk.
You can only grow a small account by taking on risks.
If you followed the most hyped risk number; risk 2% of your account, then a $10 account risks $0.2, a $100 risk $2, and a $1000 account risks $20.
A $1000 account can work with this percentage, no way can a $10 account.
Even the smallest trade size will hit your risk allowance, that is why the smaller your account the more you should be willing to risk.
That means you should be comfortable losing with a cold face. Not losing because of emotions playing on your head. Trust the process.
Trading a smaller account is therefore a lot harder than trading a big account. It calls for a different mental framework.
A lot of screen time
Plan for several hours behind the charts, you may need to enter and exit trades several times in a trading day.
The right trading tools.
This is super important.
A small account forces you to day trade and scalp.
You need a forex broker with super-low spreads and commissions.
For this experiment, there are my tools.
Platform: MetaTrader 4
Charts: Naked Japanese Candlesticks
Indicators: TTIY Key Pivot Levels (Sign up to my newsletter to download one for free)
As you can see, my setup is pretty basic. Pure price action charts and I only throw in my pivots indicator.
I use candlestick patterns with the aid of the trend line and pivot levels to make most of the entry and exit decisions.
Your strategy should guide you on how you make your trade decisions; it could be a moving average, chart pattern, or any other indicator, whatever the tool, you want to stick with it for consistency.