Can you Really Make a $500 acc. grow

Beginner Questions
21

To my mind $500 is just way under-capitalised.

Following the orthodox rule of risking no more than 2% per trade is nigh on impossible when that only amounts to $10.

However, $5,000 is neither a huge risk, nor an insignificant amount to trade with, as long as you are disciplined. 2% now would obviously be $100, and most forms of access to the market will permit this level of risk.

Even if you only have a mediocre strategy and end up taking larger risks and gaining smaller profits per trade than your plan dictates, this account can still grow significantly and it won’t take a lot of time if you compound your gains in to the next trade.

Try it with a calculator.
Say your strategy gives only a 60% win rate, surely about the minimum that’s acceptable. You take 1 trade per day and aim for a max 2% loss or a fixed 4% gain. This would give you a risk:reward of 1:2. However, let’s say you haven’t allowed sufficiently for spreads etc. so your net risk goes up to -2.5%, while your net gain goes down to +3.5%.

After 100 trades, which would take about 6 months, you’ve got $14k. After another 100 trades, let’s say a year’s trading, you’ve got $40k.

The only thing needed, apart from a strategy of course, is discipline.

1 Like
22

I must have misunderstood you, because we all know you don’t post rubbish, and have reasons for what you say here.

I think others will misunderstand you, too.

Introductory trading books are full of detailed explanations and examples demonstrating why it’s far easier, and more likely, and a better plan, for most traders to make profits from methods with win rates around 30-40% than it is from methods with win rates around 60-70%, and for a whole variety of reasons they’re certainly right about this.

So stating - without at least clearly defining a context - that a 60% win rate is “surely about the minimum that’s acceptable” is bound to cause some consternation, Tom! Unless you’re really maintaining that all those authors and teachers have the whole thing wrong. But I don’t think you meant to say that? (I hope not, anyway.)

23

Yep Charlie, I’m aware of it. But there’s a lot of stuff spoken about trading that’s unchallenged, sometimes unchallengable due to lack of statistics. So although winning 40% or lower win rate strategies can make money, and people do say they ARE making money, there are also 60% win rate strategies that we could say the same about.

I think most commentators have their own reasons for promoting strategies with win rates lower than 50%.

But given two strategies, each demanding the same capital, the same approach to trading, one having a 40% win rate and one having 60% win rate, I’d go for the 60% - so 40% would be below my minimum. Almost certainly a new trader will (rightly or wrongly) avoid a sub-50% strategy like the kiss of death.

But how is a 60% win rate strategy hard to find? In reality, there are plenty of them, but the people with the discipline to run them are few and far between.

1 Like
24

Too bad that your myfxbook account is not public.

25

Yea. I was going to upload images but after this whole website facelift, I’m now tagged as a new user and can’t post pictures.

Darn it.

perhaps I’ll try again

26

there is a big contradiction between this opinion and the opinion that reward targets must be bigger than stop losses, tho

the normal advice to trade with at least 1:2 (risk:reward) will not have a win rate above 50%

you don’t agree with the usual r:r advice given?

27

No, Wit, or whomever is watching. Please do not listen to this nonsense. You have only two goals as a trader.

  1. Preserve Your Capital

  2. Trade Well

  3. Alpha/Profit is a byproduct of preserving your capital first, because how can you trade if you have no money it’s like “how can you have any pudding if you haven’t eaten your meat/”

  4. Trading well, if you are trading well you don’t worry about goals, efficiency, growth and all the rest of the Stupid corporate platitudes the corporate drones throw around. If you trade well, in general, you can recover even from entry order mistakes, unexpected news, etc. that can cause losses. Remember when a trade is no longer a trade, and a loss is no longer a loss, and a profit is no longer a profit, then you have made progress. It’s like the famous guy said “you have made progress when a punch is no longer a punch, and a kick is no longer a kick”

The Ever Trading Well VIPER

28

how did you do that?

29

usual way is to trade on demo, and not switch to real account until you did a few hundred trades without losing on balance

30

Well that’s impressive, so, I have a question, if you know. What percentage of daily ATR are you taking per pair. I really would like to see the MyFXBook numbers, I think it would be educational for all. Or maybe even cooler would be an audited Blotter, or prospectus :slight_smile:

The Ever Hanging Out Under The Log VIPER

31

I think its possible to start with whatever you have available ($5 or $5000); its all relative I guess.

33

In my view $500 is proper amount for trading.if we had good demo experience this amount will not go waste. I would like to make a plan to use this amount. growing this amount by taking small profit is easy and possible, on the other hand when you try to double your amount in no time it can be a risky that can ruin your capital.

34

Of course that’s possible, the main thing is to start. Let it be a small account. The main thing is that you have a good strategy, which has to give atleast 70% a month.

35

mike18, hello. Honestly if you are going to step out and say 70% per month, well.

“mike18, what you’ve just said is one of the most insanely idiotic things I have ever heard. At no point in your rambling, incoherent response were you even close to anything that could be considered a rational thought. Everyone in this thread is now dumber for having listened to it. I award you no points, and may God have mercy on your soul.” :grin:

The Ever Billy VIPER

2 Likes
36

Haha, brilliant as always

37

I can’t be as tactful or eloquent as Trade Viper.

I’ll just say “You mad, boy”. :laughing:

1 Like
38

tIt’s possible but be careful about capital management and overtrading. To a certain extent, a small account puts unnecessary pressure to get decent returns which in turn destroy your account.

1 Like
39

Hey, profanity, watch out !!! :joy:

The Never Having An Issue With The FCC VIPER

40

Before depositing any form of amount into a live account, please find yourself a reputable broker. Because, if you had a working strategy which gives you a return of (Let’s say 80% of ROI), your broker will definitely play certain “tricks” on you and that it’ll be harder for you to profit in the long-term.

Thus, imo, any amount of money deposited into a trading account is okay as there is no “Fixed” amount to how much you should be depositing because in the end, it all boils down to your personal risk management. If you had an edge accompanied with a strictest risk management strategy, trust me, any amount is fine.

For those whom are stating/mentioning the term “under-capitalized” here. I guessed they are probably trading with a huge volume size to be stating USD500 as an under-capitalized account. Frankly speaking, when I started trading forex in the year 2008, there wasn’t many micro lots account allowed for traders as you were most likely forced to fund your account with an amount from hundreds-thousands to be able to trade. Notwithstanding the fact that, I had traded with several small sized accounts in the past such as USD5/USD50/USD10/USD100/USD1000/USD10000 and I’d never experienced the under-capitalized issues with it before. (Because with a small size account, I will usually apply the tightest risk management which is at 1%) and that I will only risk and compound the trading account once I saw a good yet high probabilities trade in the market which allowed me to double/tripled the growth exponentially. (Utilize Leverage/Risk Management Wisely in your favor).

All the best, and before depositing into a live account, always demo trade first as it helps build a foundation on how the market works. Good luck :slight_smile:

Best Regards,
C.