Many new traders are looking for the best methods on how to grow a small trading account successfully. The keyword here being "successfully"!
There is no doubt there is money to be made in the stock market. I know that most of you are coming to our website today wanting to make money yet have small trading accounts (under $30k in equity).
I also know you want to grow your trading account successfully. And, contrary to popular belief, trading with smaller amounts can be beneficial to new traders.
If you can relate to what I just described, keep reading; I'll show you how to grow your account!
Four Ways on How to Grow a Small Trading Account Successfully
- How to grow a small trading account successfully
- Open a paper trading account
- Get good at trading in a small account
- Become a master at one trading strategy
- Don't set unrealistic profit targets
1. Get Good at Trading a Small Account
On the surface this might not make sense, but if you can't continuously make profits with $1k how in the world are you going to make profits with $50k?
If there's no real evidence you can actually make money trading with real capital, it makes no sense to start with all your money on the line. Your focus in this game is to learn how to make your small account grow.
Even if you have the $50k available I don't recommend funding your account with all of it. Because you need to be good at trading in a small account before you should ever consider putting more money on the line.
Your job is to treat your $5k trading account like a $50k account. With every single trade you make, you should always ensure at least 98% of your account is protected.
So for a $5k account, your risk should only be $50-$100 per trade. Likewise, with a $50k account, you're risking only $500-$1000 per trade.
Remember the goal with a small account is to find your edge, follow your rules and master your strategy. Or, in other words, learn your how. You’re not trying to hit home runs here folks, first base is enough.
2. Master One Strategy with How to Grow a Small Trading Account Successfully
One of the most effective ways to succeed in day trading is by having a sound trading methodology. Likewise, to make money consistently in the market, you must first master a strategy like the bull flag momentum trading strategy.
I recommend to first, define your strategy; second, build a trading plan around it; third, manage risk effectively; and forth, follow your plan exactly.
I can honestly say, if you can do these things you will see your trading account grow, albeit slowly, but consistently.
Your trading strategy is the only thing you can control in trading. The results you get should be the result of 100% trading strategy and not guesswork.
Before you put real money on the line, paper trade everything first. That way, you can develop, refine and paper trade your system.
Paper trading may seem boring, but it is a fantastic way to learn how order entries and exits work, and more importantly, learn from your mistakes - all without losing real money.
3. Don’t Set Daily Profit Goals
I can’t even tell you how many people ask questions like ‘How much money do I need to make $1,000 a month’? Or how long do you think it will take before I can quit my job?
No judgement here but people who ask these questions totally miss the point about what success in trading is. Success is defining and refining a strategy, sticking to your trading plan and following your rules at all times. Profits which will come are secondary.
Some days there are multiple trading opportunities, other days, none. That's just the nature of the beast. Unfortunately, if you're of the mindset that you "need" to make $500 a day you'll be prone to over trade and/or force trades with low-quality setups.
4. Set Realistic Expectations
Do you really think it's possible to grow a $5k account to a $50k account in 6 months? I don't. But, I do believe it is possible in time.
You won't get rich overnight, so please set realistic expectations. Instead, concentrate on trading your system, trading it consistently and refine it when necessary. Trading is a marathon, not a sprint.
How to Grow a Small Trading Account Successfully Summary
Join us today if you want to avoid the common mistakes of new traders. Depending on who you talk to, around 80% to 90% of traders end up losing and leave the industry altogether. We'll show you why they fail so you can learn to avoid the common mistakes early. Join Bullish Bears community today in the marathon.
