If I were to trade a $5000 account, is it best to try to compound my profits? Or, is it best to just trade it the regular way (non-compounding)? Assuming you had a profitable trading system, how specifically would YOU trade a $5000 account?
If you are Rich enough that losing such amount will be not overly point of worry than I will answer this question differently sometime later. However, if you are referring to normal scenario than it will be crazy to work through such amount and yet you are not entirely sure on how to go about it. Anyhow, I think you need to work it through how you trade, as if you are aggressive (scalping) or such than better not to compound. If you work with covering the risk decently than I say it is great to compound, but make sure to have it at 50% not completely.
Well, I don’t plan to trade a $5000 account at this current time… but it is something I could potentially do in the not to far distant future. I am just wanting ideas of how others here would trade a $5000 account. I am more of a swing trader than a scalper (in fact, I don’t scalp at all. I generally target around 100 pips. Sometimes a little more, sometimes a little less). It of course depends on the currency and how volatile it is. My R/R ratio is usually either 1:2 or 1:3.
I am still interested in how others here would trade such an account as I have described.
It depends how risk averse you are and whether you need to withdraw profits from it.
In other words it depends on your own financial circumstances.
How to trade any sized account depends on that, not on the amount of money in the account.
If I didn’t have a profitable trading system I’d only be trading a demo account.
How I’d trade with$500 or $5,000 or $50,000 would depend on my own risk management aims and on how risky the system is, not on how profitable it is.
I’d judge it according to things like MAE, PF and all the other things you need to understand, to work out what position sizes to use.