I started with the School of Pipsology, the lessons mention more than a couple of times indicating that small accounts wouldn’t workout or end up loosing.
I am student, so it’s obvious that I can’t deposit like a $1000 to star with, or as they mention in the lessons an account less than $10,000 is also small.
I was highly motivated to learn and get started with it, but the fact they keep mentioning this making me loose motivation.
I am planning on graduating from the School of Pipsology and then paper trade for a month at least, then will deposit real money.
My question does it really matter that I have a big amount in my account or not. I don’t want to be quick rich, it’s okay I know it takes time, all I know is that is it okay to start with even $100 and of course with facts.
by means of you can bring some amount of profit if you have good knowledge and experience , actually from this volatile trading place its really difficult to make profit by using small balance.
I don’t understand how? because let it be a big account or small, the trade setups and target pips are same, It doesn’t effect the profit as a percentage even it is small or big. I know you are referring to pulling out profits but what if as a beginner just focus on growing an account instead of worrying about how much profit I am making in cash and focus more on the profit percentage
@anonymd there is no problem start with small account. Some brokers will offer you start with $5. Everyone always mention start with decent amounts of money because you working so hard to earn some money to make a living from Trading.
For example- you open a Trading account $100 and after 1 month of trading your account balance grow $130 so you earn $30 a month your confident grow and some days later you become overconfident and start open more trades and you make a mistakes. Now your Trading account balance $80. What would you do now?
After working so and spending so much time and money on Trading you become frustrated and you think Trading is not for you. This process face every single trader.
Still you want to open a $100 account go for it because you will learn lots of things.
Without learning you cant become profitable trader.
Starting with a small account is not the draw-back most people think it is. It has some inherent negative characteristics - mainly that traders often regard losses as affordable or even trivial so they are slack with technique and risk management. But small accounts also drive traders towards intra-day trading for a few pips at a time, and this is a dangerous way to start trading.
@anonymd is right - it is about the percentages you make, not the money you spend.
I understand there is always risk and psychological factors effecting, but if I open a bigger account it would be the same case right no matter the money. Just tell me how would a big account will help compared to small account.
any kind of amount can be profitable if there is most powerful analyzing trade knowledge and experience. the result of trading can be useless in spite of having large amount if there is poor trading knowledge.
Its dangerous for a new trader as it appears low risk but is actually so very difficult to do successfully and consistently that it drives trading towards emotional responses and away from objectivity. I’m not saying day-trading is impossible, its just vanishingly rare for a new trader to be any good at it starting from scratch.
I would always recommend starting on the daily time-frame and don’t even look at any chart with a shorter time-frame until you’re running a consistently profitable strategy. (in which case why bother?)
Its worth recognising that from a $1000 account, and a not very high win rate, and a not very high number of trades per month and a not very high r:r, its still possible to gain an income higher than most workers in the population in just a few years.
@tommor but incase where I can’t start with such an amount, its okay to start with $100 right? because the psychological feeling that the amount being small wouldn’t possibly occur to me as it IS A BIG amount for me.
So, Should I only look at daily time frame in the beginning but for how long before I an change and start playing around with shorter time frames?
The amount you start with is not the key to successful trading. The aim of successful trading is a decent income of thousands per year for ever, not a lottery win in the millions once in a life-time. Its a process, not an event. Trading is like mining granite out of the ground, its not like hunting the world’s biggest diamond.
If you start on the lower time-frames, you will 99% certainly wipe out. If you become profitable on D1, you will have no need to run lower time-frame trades.
Trading about finding the right mindset aswell as a strategy that consistently profitable, as we all different it takes longer for some people.It wise to start with. Small account
It is not quite as simple as that. For example, it is often said not to risk more than 1-2% capital per trade. That limits the stoploss amount on a $100 account to 1-2 dollars, whereas a $10000 account has far more flexibility to manage a combination of position size and stoploss distance within the same limitation.
For the same reason, small account traders tend to use short timeframe charts of less than 1 hour, where stop distances can usually be less. Whilst there are indeed methods of trading such short timeframes many traders would agree that it is more demanding than with longer term charts like 4-hour or daily and harder to achieve consistent profitability in the early stages while trying to build the account.
As @fxonfire says above, if your $100 drops to $80 or less then it is even harder to restore your account. And I also agree with the comment by @fxonfire that you may soon become frustrated with gaining only a few dollars and losing some as you try to grow your account. It is not possible to observe conservative risk management and simultaneously build your account rapidly. So you will need to find a comfort zone between acceptable risk-taking and anticipated growth rate.
You are obviously advanced enough to even realise that it will be difficult and that is a good start :). And it is good that you will be starting with paper trading. But be aware that paper trading is quite different to live trading and you will need to be very careful when you start with real money.
IMO, your approach is exactly correct. I managed a $63 account for six months, and while it was a slow ride to not having enough money to place a margin trade, it taught me how to control risk,
Money management and emotional control. You will blow your account first time when going live with a $100 account size. What you learn from it is experience. And that’s the path to eventual success.
Your introduction is refreshingly different than many new members. Welcome to Babypips. I am sure you are starting off on the right footing by assuming this is not easy, and you are willing to prove concept before dreaming about making big money from nothing to start with.
The best way to start this is for free, and if you follow Babypips School of Pipsology for the background education, and you open a free demo account with a reasonable broker, you should be able to trade on demo account until such time as you gain confidence to know that your trading plan can return positive results. That can be done by paper trading and / or by back testing on such paper account from historical data then forward testing same. It takes a long time and many trials and errors but believe me, it is far better than ending up as one of the 90% who blow out an account (big or small) by trading without a plan and not understanding risk management and psychology before they even get to technical analysis or placing a first trade.
As an encouragement for you to start to build up your future Forex bank and in a way start trading live for no money either, take a look at the CRO (crypto.com) top up card. I use the ruby coloured one that gives 2% cash back on all purchases but paid in CRO tokens, not in the currency you spend in.
I signed up for this card in September 2020, and I have benefitted more than $800 in real money terms in the 15 months that followed opening that account. It goes like this.
You sign up for the card, and send them your personal bank account name, number, and submit two forms of ID just like signing up for any other financial service. I would normally provide a link for you in this thread to my affiliation in which case both you and I get a $50 starting bonus from crypto.com. But I will not do this on Babypips. I decided I would never ask any member for any commitment to anything that I am affiliated with because that is against the spirit of this forum.
Anyway, here was the business analysis. Your case may not be as compelling but the principle is the same. I intend to spend £2,000 per month on all purchases that were previously paid for by either debit or credit card. In fact I also paid some multi-£k bills for property refurbishment as well, so my average spend was over £3K per month.
The ruby CRO card is a Visa Debit card, and to use it you first have to top it up with fiat currency (in my case GBP) in a currency of your bank account. Note that I need to keep a float on the card so I pay the minimum with the application. This is a six month lock in of CRO tokens at the prevailing market rate, equivalent to about £300 when I took out the card. When I receive the physical card and sign it, I send a top up request and can make an immediate cash deposit from my bank account. This usually takes about 10 seconds to clear funds. So I set up an initial £2,000 balance on the card and every month I need to top it up by £2,000 per month. Each purchase I make with the card my CRO account is credited by the number of CRO tokens that equates to 2% of what I spent that month. Each purchase is accompanied by an e-mail to my registered email address (I use a secure VPN e-mail service just for finance, separate from my real life email). It advises time and date and amount spent. So in an ideal calculation, I top up for 12 months with £2,000 each time and the “interest” I get paid is 2% per month (albeit in CRO tokens, not fiat), so my return on investment is 24% per year.
Even if I do not have the initial £300 to tie up the CRO tokens when I order the card, I can take a personal loan in the sum of, say, £2,500 so I can pay the tie-in for the tokens and top up the card with the first month credit.
What actually happened? In my case I should have earned, over 15 months, a sum of £2,000 x 2% x 15 = £600. So during the first few months, the CRO token was worth about $0.08 in Q4, 2020, $0.24 in Q1, 2021, $0.12 in Q2, 2021, $0.18 in Q3, 2021 and it mooned to around $0.60 in Q4, 2021. These are approximate figures. I actually sold 80% of my CRO tokens between 21 and 24Nov21, at around $0.78 per token, putting the investment funds directly into a low cap token that has since doubled. Along with two $50 introduction fees, the actual amount I cashed out with in late November was about £2,000. I joked with my wife when we got the card saying "hey, if CRO can do a 50X in a year, everything we buy on this card we get for free. I did not know until mid November how full of insight that statement had been. Just luck I guess you could say.
I would certainly not expect that to happen all the time to everyone, but I do quite a few of these “get rich slow” schemes every year, just for fun. Occasionally, one pays off handsomely.
Try it, whilst you are training for Forex trading. You just might have a decent bank to start trading with in a couple of years.
Options are:
Do nothing (99% of students)
Do SOMETHING now. (1% winners)
in my opinion it does matter at the beginning. if you won’t be able to make a 1.000$ from 100$, so you won’t make a 10.000$ from a 1.000$ and so on.
there is many factors: strategy or how many trades you want to open at the same time, etc.
I started with a 100$ and the smallest lot available - in most cases 0.1$/pip - . have learned a lot - there are million mistakes you will do, give it a time.
Small account just minimize the losses, but talking about the gain, they do not offer big such, that’s why most of us tends to ignore that.
tho, if it helps, i deposit small funds when checking out brokers, that way i can see if it is liking to my style or not.
