I’m unsure if its just me or more of a universal phenomena, but I find it incredibly easy to make profit on a regular basis with a smaller account; say anything between $5-$100 investment. Whereas when I trade a larger account for example $500 upwards, I find myself breaking even or making a loss, and very seldom make a profit.
To overcome this handicap I open several accounts with my broker and split my initial investment between them, so if I have $500.00 to invest I would divide that buy x amount of accounts. I trade the several accounts simultaneously taking the same trades on each account, this allows me to be more relaxed while speculating, because I am not making or losing what I consider to be large amounts of money, which keeps me out of that euphoric mind state. I’m confident in my ability to turn X into Y, despite making a small profit on a daily basis, but the small profits multiplied by x amount of account can amount up to something considerable, you would be surprised.
Does anyone else find it easier to being constantly profitable by trading smaller amount in your account, and if so I would be interested in hearing what method you use
I actually find the opposite true, I used to loose small accounts very quickly indeed - mainly because it had no influence on me if I had the money or not. I have always had a high gambling mentality and became accustomed to loosing more than I could afford; driven primarily by my history of going through a Casino addiction phase - this lesson [or rather emotional acceptance of loosing and moving on] has always stuck with me. Ironically, this helps a lot with trading - as I don’t become emotionally involved, unlike others, perhaps.
By opening an account that was significant made me treat it with far more importance!
I suppose every cloud has a silver lining…what drags you down in life at one point in time actually results in a much bigger advantage later down the line
Thank you for your comment Jezzode, I found it very insightful, and has given me some food for thought.
I find that if I have a large account, lets say $2000 for example and I lose a trade (3%) of my account $60, I would end up revenge trading trying to claw back what has been lost. Sometimes I am able to maintain my mind frame, but there is only so long I can maintain the will power to not break certain rules.
But when I speculate with smaller amounts, lets say $25 and lose (3%) of my account $0.75, there is no urge to revenge trade, I’m just able to accept and move on without any conflicting emotions.
Exactly - emotional aspects of trading can be, and typically are far greater than many new traders take into consideration. It’s a big learning curve, and at times you just have to accept it for what it is and walk away.
However, once you have a thoroughly tested trading approach with the statistics to back up each and every decision, it becomes more ‘acceptable’ to take the losses as you know in the long run you will turn a profit.
You can manage to organize good trading with any amount on your account. All you need is a desire to do it and brains. Another question is would you be satisfied with profit that you’d receive having a depo of 5-100 bucks?
