I am planning to scale up my trading account.
What do you think?
2 Likes
I’d rather be trading 100k, but 10k is also fine. As for you, depends if you are consistently profitable. If not, scaling up won’t provide any better benefits.
The advantage higher account sizes offer is more breathing space. If you want to make enough money to pay for your BASIC monthly outgoings I would say $100k is an ideal starting account.
2 Likes
Why do you want to add to it?
Adding to your account won’t change anything trading-wise. It all comes down to percentage. Profit amount doesn’t mean much in terms of strategic trading. In my opinion it’s all about %. If you profit $200, it means nothing because it says nothing about your R:R or your profit relative to your account. $5k profit in a $10k account is different than $5k profit in a $100k account.
If you are consistently profitable with your 10k account, why not? But i wouldnt just add a 0 and go on, because of the rapitly increasing pressure to perform. Why dont you split up your scaling into several steps? Adding 10k every month up until you reach your desired account size? This gives you time to get used to the higher wins and losses.
1 Like
Thanks.
Is there any psychological difference?
It really depends on your wallet and how strong your emotions are. If 100k isnt much money for you than adding a 0 could be fine and doesnt stress you out. How much emotions are involved depends also on your risk management: how much % do you risk every trade?
If you leave your comfort zone, chances are that you will trade with too much fear, resulting in mistakes which destroy your trading performance. So you have to know yourself. Are you ready to handle a 100k account? Are you this much emotionally controlled that you can just add a 0?
Me for example have tested a strategy and i want to go live with it in september. I am willing to fund my account with 20k. If i would add more money, i would most certainly be to fearful to trade my strategy properly. I am a very emotional trader, which is a handicap i have to deal with in other aspects of trading too.
But willing to risk 20k doesnt mean that i jump in with this much money in september. I will start with 1000 risking 10, next month 2000 risking 20 and so on, up until i reach 20k. After that, monthly gains should allow me to scale up in modest steps which getting bigger with time.
I made a scaling plan in addition to my trading plan and journal to plan my scaling steps. It also reminds me of how long i will have to be consistently profitable to allow me to pay me a salary.
At this time my scaling plan is of course only wishful thinking. But if my strategy will perform like expected i will stay cautious only risking money accordingly to my plan.
How did you end up with a 10k account? Did you scale up in steps or did you start with 10k right away? How was it for you? Do you were scared of losing money? How long did you trade your 10k account?
Think about it. Because scaling up too quickly is a mistake profitable traders can make, just like overtrading / not respecting stop losses etc. are beginner mistakes.
Yes, there is a significant difference because the profit and losses is calculated using a percentage, and since the percentage is applied to the total capital, the anticipated profits and losses will be greater if the total capital is higher.