Why do people start with small accounts?

[Penny Picks]

Trading w/a small trading acct

I've been in the trading arena for a long time. I've also lost more than my share of trading cash.

It's taken a long time but I' finally got something that works for me; a small trading acct.

It only takes a couple of rules.

1. Acct size ~ $300 Max of $500 USD
2. A stock screen that you can trust (This is a paid service so I can't help here.)
3. A couple of common easy to get price indicators. My 2 favorites are shown on the chart. There are a couple of others I use that are not shown.

Attached is an example of one of my recent trades. (A Note. I'm not selling anything because I don't have anything to sell)

I bet $250 USD in this trade and closed out at .61 for a bit of profit of $360 USD For a couple of months low risk that's a pretty fair ROI

That's not quite enough to pay off the national debt but it's a start.
Oh. 5 or 6 months ago I had one that returned about $2700. The saying goes "Some trades are DIAMOND, SOME TRADES ARE STONE

When I started out with the Small Cap / Penny stocks I returned the initial $300 back to my bank acct. So now I guess I'm playing with "House" money.

Another note: I've been trading since the mid 1980s and I've lost more than my fair share. One thing I've learned is to remove the GREED FACTOR!

 

[Henow1969]

If you are a total beginner, then you must learn the theory about Forex. This information is available in the Internet for free. It will not take you a lot of time to learn it, about 1 week will be enough.

 

[wmram]

Why not open a small account. I live in the United States; Oanda is one of the primary forex brokers here.
Take $100.00 and open a 50:1 leverage account and start trading EurUsd microlots (0.01) only EurUsd.
The objective is to keep the account alive; if you can grow the account all the better. Remember trading forex is a very scalable business; if you can keep a $100 account alive long enough to prove that you can do it, then trading standard size lots will be a lot easier for you financially and psychologically. Why do this with real money and not demo ? Because I don't think that the idea of profit and loss is enough; I think that you need to feel it. Skin in the game if you will.

 

[tomorton]

Assuming you have a reliable broker who is not going to disappear with your money to South America, place as much capital as you can into your trading account. This will allow you to trade in realistic amounts without using the highest leverage available: if there is a choice, use the lowest leverage you can.

Ensure that your risk per trade is no more than 2% of your account capital. Use 1% as a risk limit if you prefer. But do not take any trades with less or more than your standard risk limit.

Do not run large numbers of trades simultaneously and beware of excessive exposure to the same currency. There's no such thing as safety through diversification in forex.

 

[ph_trader]

there are a lot of factors deciding what capital u should start with, if the broker is new and u are a vet trader, then always start small and try to hit an ROI and see if any problem occurs during the process. but i suggest going for more well known and reliable brokers like hotforex which are heavily regulated. if u are a new trader even if the broker is well known and safe still do start small. uu dont wanna fall for what i did when i first started forex and watched that hard earned money fly in 10 minutes. LOL so yeah. good luck

 

[Melodiousmelody]

Why take risks at the initial stage, if there is a chance greater than what will happen, drain

I agree. One should always start with less capital since in the beginning one doesn't have much knowledge so risking too much capital in this stage would in no way help a trader get better.

 

[Joseph99]

I agree. One should always start with less capital since in the beginning one doesn't have much knowledge so risking too much capital in this stage would in no way help a trader get better.

Right.

 

[xjtorerox]

Because there is a lot of knowledge to absorb and a lot of mistakes to make before risking more money.

Every trading teacher says that your goal at the beginning is to keep your capital. So is better to start with less money.

 

[galbi]

Because when you are starting, you are very cautious about spending your money into the broker's account hoping not to get wiped out easily.

 

[Felix_trade]

Because there is a lot of knowledge to absorb and a lot of mistakes to make before risking more money.

Every trading teacher says that your goal at the beginning is to keep your capital. So is better to start with less money.

Agree with you.

 

[Attila the trader]

You sometimes see threads with people trying to turn professional trader with as little as 10k or even 5k. I can't understand the thought process there.

Let's say you start with 10k and compare trading for a living with getting a job.

If I work for a living, that's likely to cover my costs of living, and if I can set aside 100 per month, I'll end up gaining 1,200 over the year, or 12%. Better than a lot of hedge funds. If I can save 500 a month, my account is up 60%, better than almost all hedge funds! You are unlikely to make that return in trading in a year, and even if you could, after you have deducted living costs, what are the chances. Start with 5k, and we're talking 24% or 120%. Be realistic.

Working for a living, you're likely to increase your account more and gain pension money etc compared to trading. And the other thing to consider of course, is that if trading, your account can go down. Working doesn't usually lead to a loss.

Even for successful traders, it seems it only makes financial sense if your account is in the 6 figures*.




*of course some people can trade and work, and that makes sense if they can do it. I'm just referring to the idea of solely trading, no job.

btw in a third world country like my one , 10k is pretty hefty

 

[Galen130]

Everyone starts with small bills so that there are no big losses.

Agreed. I was trading stocks after the whole Y2K scare, but I couldn't spare the time to actively trade. My portfolio was inactive for 15 years with no stocks to speak of...and now I'm back to learn how to day trade amid this whole Covid-19 epidemic. Boy, I sure can pick when I start trading on the markets. Lol. I digress. I've started small again (4 figures) and I'm nowhere near a day-traders portfolio on my platform. So I spend time every week for over a month just moving stuff around..selling/buying/reinvesting. It's usually for a small loss, but I've gotten bored playing with stock simulators where I pretty much handle myself well. Starting small isn't a bad thing, but if you're impatient...it can lead to potentially disastrous mistakes. Thanks for reading my rant!!!

 

[chartmans]

btw in a third world country like my one , 10k is pretty hefty

People start with small accounts as they don’t want to risk their money by putting in higher amounts. Also, they want to check the trading conditions of the broker and grow their account gradually. People have less knowledge and experience at the starting so it’s better to start off with a small account only. If you start with high capital - there is a probability of losing more.