You have to think about relative not absolute targets and risk then deposit size won’t matter only you may feel that it’s not enough and you want to make more but that’s clearly the wrong path.
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Any account can be profitable if the best evaluating trading knowledge and experience are used. Trading results can be pointless even if you have a huge quantity of money if you have bad trading understanding.
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What I don’t get is how? Because the trade setups and target pips remain the same whether the account is large or little, the profit as a percentage is unaffected. I understand you’re talking about taking profits out, but what if, as a novice, I just focus on expanding an account rather than caring about how much money I’m making in cash, and instead focus on the profit percentage?
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This is actually one of the key problems with a small account.
The only danger with a small account is exposure risk. And if all the percentage relationships remain the same compared with trading a large account then actual position sizes will inevitably be very small and the earnings equally small, which for many people will, at some stage, lead to frustration and the temptation to take larger risks via higher leverage, for example.
In addition, a larger account can absorb a period of losses and still continue, but when a small account takes a series of hits it is even more difficult to recover with only tiny risk exposure.
Also, larger capital accounts do not necessarily use all their funds against a single position. This offers far greater flexibility and opportunity to scale in/out of positions and/or have multiple positions across different instruments. A small account has far less scope for flexibility.
These basic differences mean a small account is much more limited in risk opportunities, managing positions and recovering from a series of losses even though the risk per trade is moderate.
Another problem area is the choice of timeframe. Longer timeframes are generally considered more reliable but require wider stop-losses to avoid premature stop outs on spikes/pullbacks. A small account does not have the same capability to take a reasonable sized position with the related wider stop-loss requirement and still maintain an acceptable risk exposure when compared with a larger account.
This does not mean it is impossible. It just means there are additional restrictive issues relating to account size in addition to the core issue of getting the direction right.
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Hi,
So I actually started my account off with $100. At first I was going to try to do 2% and watch it grow slowly but then I decided to do the 20 pip $20 challenge. Now because I’m a swing trader I have to adjust the lot size to have the correct amount of risk. But I like this strategy because it doesn’t risk too much and it can grow my account. I’ll link the video as well if you’re interested! Still always use risk management. I’ve only been trading for 3 months and it made me $60 so far. Definitely not a bad investment for $20. It won’t let me link it check out the moving average “How to grow a small forex account” on YouTube.
It is worth noting that he himself states that this is “extremely risky trading” and that “you probably shouldn’t do this”.
It is also worth noting that it only works if every trade is successful, otherwise you are just running up and down the chart ladder.
It is also worth noting that, as he says, “you have to know where to get in” - is that not both the crux and crucifix of every trading method? Although you are “only” looking for 20 pips per trade the stoploss is actually slightly less than 20 pips (and don’t forget the spread) so entry points are really the key to this. If you can hit the market on every trade within 20 pips of its recent high/low then you probably don’t need this kind of method anyway 
It is all based on compounding and that is not a bad thing, but maybe this is not the way to apply it for most newcomers to forex…
On the plus side, however, one could add that since consistently around 75+% of retail traders lose their money there is not much point in trying to just copy what everyone is doing!!! It is clear you have to approach with an open and questioning mind all the standard rules, myths and jargon that is infinitely bandied around on forums and You-tubes. If 75% get it wrong then you have to do something differently.
But I am far from convinced that this “20-pip” challenge is worth anything more than a fun game to try out with spare money. If it works for you - great! 
This is true but I still thought it was worth sharing me myself I change the pips and just use the compounding principle. So if I risked 200 pips I would trade 0.03 lot sizes. I think even to maybe get your account to $500 it could potentially happen. All trading has risks after all it’s about managing the risk.
Hi anonymd
Your question is actually very difficult to answer from my own point of view and my own experience. I use very small trading accounts to test my trading strategies in segments before implementing my entire strategy as a complete trading plan. I can use December 2021 as an example. I completed all my segments and ran my full strategy on an account that only had $7 in it. I ended December on $23. That is after a total of 43 losses and 16 wins. Using this very small trading account proved to me that my new trading strategy works under extreme conditions with maximum losses. I was able to identify my unnecessary losses and will cut them down by half in January 2022. The point is this: I can not trade demo accounts or paper trading, it interferes with my mindset since I know there is an element of risk missing that makes me behave differently towards how I trade, so I need a small trading account when improving myself and my trading habits with real risk involved.
My parting words are as follows: Learning from the School of Pipsology is brilliant…But that should only be your guideline. You trade with your personality and individual strongpoints. If something does not sit well with you information wise like the small trading account warnings, then ignore that advice for now and do your own thing. By doing your own thing you will gain enough experience to finally either understand and accept the wisdom of not using a small trading account, or you will find a way through the cracks to use a small trading account to your benefit that falls outside the norm of doing things, like I have found a perfect use for small trading accounts that works with the way I process information.
This is your journey. You are going to make plenty of mistakes and misjudge a lot of things like we all do. The trick is to be fearless. I do not mean you should be reckless, but you should be fearless. The market will chew you up if it smells fear, for fear brings hesitation and second guessing yourself, and that beast brings failure with it!
Good luck to you and happy hunting!
Can’t remember but I this I got the quote from this web site.
“If you face consistent losses from this market, you should change your strategy”.
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Exactly!!! I couldnt have said it any better.
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U have just touched on the really impt aspect: a small account will not allow u keep to risk management cos ur SL will have to be really small to keep to the recommended risk of 2% per trade. No risk =management will surely lead to emotional trades thereby ruining you and your psychology in the long run.
I don't see how it is a problem using small account. It is useful for beginner traders to experience live trading with lower risks and capital involved in it.
And experienced traders can use smaller accounts to check their new skills or strategies in live trading to minimize losses.
Small account is not a problem until you know when to enter the market and when to leave. Small account let you know how to trade keeping in mind the long term review.
The fact that something is good or is working doesnt mean that there arent problems or issues associated with it.
One problem I have with small accounts is that when I am already in a trade which is going against me, but I definitely know it is going to shortly turn and go in my favour, because the account is so small it cant accommodate another position which would enable me to double my gains.
Yesterday I saw gold at 1847 and I knew it would give back most of the gains it had made over the last two days and go back down to the low 1830s. I couldnt place any trades because my account is so small and I was already in a trade. smh.
What I find is that many of the people posting on here are not speaking from real experience but just regurgitating what they hear others say.
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Not really if you are a beginner and looking for live trading experience, then using a small account is actually beneficial because the risk and capital involved in it is lower.
People -
Surely we can get past the negative attitude?
Surely its not good enough to say a small account is good because then you only lose a small amount?
I did not forget the first time I placed a Forex trade back in 2010 wondering if I had got the mechanics of the trade right. When I passed my driving test I had a Triumph Herald (£40 worth), not an E Class Merc. All things in good measure. It is easy to forget how terrifying it is the first time around - to do many things in life.
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Small account size can be a problem in forex trading because it can limit the amount of leverage that is available to the trader. Additionally, a small account size may not provide enough capital to earn good profits.
Trading a small account is not a problem, but on the contrary, it is beneficial for new traders who hesitate to risk large capital. Trading a micro account will be a great learning curve for new traders to gain confidence and experience to trade large positions.
I personally do recommend in using small account if you are starting to trade for the first time. The main aim is not to make a profit, but rather allowing you to understand the surrounding of the trading, when placing order or executing one.