TRADING SMALL ACCOUNTS IS VERY STRESSFUL AND NOT WORTH IT
From a personal experience, I don’t advice trading small accounts and here is my story.
I have traded small accounts for almost a year and I managed to win big time. I traded small accounts between $100 and $300 and I did really good BUT there was a big amount of stress, unmanaged emotions, sleepless nights, becoming greedy, couldn’t take my eyes off the screen, etc. because I could just blow up my account with one single and simple mistake and I did blow up my accounts many times. I was able to double my account in one single day, but also blow up everything in one single day too.
Trading small accounts differ from trading big accounts in the amount of risk we take.
- When trading a $300 we could take a risk of $100 in one single trade but this risk is 33.3% of our account. Imagine risking $1000 of a $3000 account. I’ve share a video on my YouTube channel about percentage trading.
- Besides, when trading small account we don’t have room to diversify. You could have a risk between 5 to 10% on one single trade. So for example if we lose 10% we need to win 11.1% to recover our loss.
One last thing related to the trading plan. We already know that a trading plan that works on a $3,000 account, also works on a $10,000, $20,000, $50,000 account. In the trading plan, we can diversify, manage risk, manage emotions, etc.
Now a TRADING PLAN that works on a 300$ can also work on a $10,000, $20,000, $50,000 account, but with lot of pressure, lot of emotions, too much risk, no room for diversificatio,n, lot of leverage is used, etc. So in this case we you manage to increase the $300 to $3,000 you have to switch to another trading plan.
So a trading plan that works on big accounts can not work on small account (because it is not possible, no room for risk management, not possible to diversify, etc.) and a trading plan that works on small accounts can not work on big accounts (because too much pressure, lot of leverage is used, etc.)
For me the trading plan that I prefer from this experience that I had is the one that works on bigger accounts. I trade the one that works for small accounts but for me it was very stressful on the long run.
Maybe there are people who enjoy trading small accounts and they are making lot of money. Personal I would not advice trading small accounts. Instead trade a big account in the proper way, will make us a decent income without all the stress.
In the end. I came up to a conclusion that everything has a price. it is up to us to decide which is more important. Health, family, peace with a steady and decent income or just making bunch of money just to make money.
Word of advice. Let’s stay humble and enjoy life
Feel free to share your thoughts guys. I really appreciate it