I heavily disagree. You’re saying that you were able to blow up your account with one single and simple mistake. And you’re also saying that you were able to double your account in one single day. This is only possible if you risk a LOT of your capital, or if you overleverage.
So I don’t think that for you it was the small capital that made it hard to trade. It was your risk management. You were trading with a ‘‘blow or grow’’ mindset. The better your risk management, the more losses you can take, therefore the more trades you have to fix the problem which is causing those losses. The better your risk management, the bigger the safety net. The worst your risk management, the smaller the safety net.
Also, trading small accounts will teach you lessons that trading big/moderate accounts could never ever teach you. For example, someone who can take 200 USD to 20,000 USD can easily take 10,000 USD to 100,000 USD. But, you can’t say the same for traders that ONLY trade bigger capital. Somebody that can take 10,000 USD to 100,000 USD, isn’t guaranteed to take 200 USD to 20,000 USD. Because taking big capital to bigger capital is not as hard as taking little capital to big capital. So trading small accounts is harder. But, that’s exactly the reason why you should trade small capital! The harder the road, the more valuable the lessons will be, that’s with nearly everything in life. It’s suggested that you trade BOTH big AND little capital. Because they BOTH teach you lessons that you will find extremely useful in your trading career in the future!
If you only trade big/moderate capital, that is literally also the ONLY thing that you will be able to do. Someone who has turned little capital into big capital is more versatile and agile. Why? because they turned little capital into big capital. So they know how to handle both sizes of capital. There are lessons to learn from both trading big AND little capital.
But it is a BIG one. I can repeat the main idea from the school of Pipsology: FX trading is not a sprint it is a marathon. If you are profitable (occasionally or not) in the beginning without an adequate risk management (not setting SL is not an adequate risk management) it will lead you to blowing your account.
I agree that larger accounts give more flexibility in opening multiple trades while retaining a low risk settings of 1-2% per trade. My perspective is from longer timeframes such as daily and holding trades for days.
I imagine the very small risks and returns of small account balances (low rewards for considerable time and effort) would lead to frustrations and then riskier trading decisions. Boom! All gone.
So you think that …for sure small accounts is when you have notion ,you have small space to breath…but your number are insane you talk kike you were a pro managing better than a hedge too risky the money you put on …now i knoew you talk about anxious and stress and more…dont you learn RISK MANAGEMENT! I WONDER HOW MANY accounts had and still burning…with proper psyco and risk management iare the basic …dont talk about 3k 5k or whatever iyou will blow it either…by the way a grow up a 100 usd in 17k in less than 2 months…with proper management certain asset and certain hour no more my trading plan period
it’s an interesting thread (and maybe a “timeless” discussion) and i’m glad it was bumped, but let’s not lose site of the fact, since you’re now apparently responding to the original poster and trying to help him out, that HIS LAST POST IN THIS FORUM WAS OVER 2 YEARS AGO
Here’s my own opinion : it’s not really a bad idea to start trading on a small account and I have two main reasons for sticking to this school of thought.
First being that ‘you can’t spend all your time demo trading’. Your emotions will need to be put to the test and demo trading doesn’t help in that aspect.
Now the majority of beginners have one common problem which is a lack of sufficient capital. Which brings me to my second reason.
If a trader can learn to be successful with a small account, then there’s an even higher chance that he will do better when he manages a larger account.
Yes trading small accounts can be a lot stressful and the chances of success are slim. Nonetheless I believe trading a small account shouldn’t be done primarily for making profit, rather it should be done to master psychology and strategies.
When these have been mastered then I can say one has successfully managed a small account regardless of how many times he got a margin call.
Truth be told it is almost impossible to make decent profits on a small account so trade them with a learning mindset and not a profit making mindset.
If you plan to make big money from a small account, forget it! The money made wouldn’t even be worth the time spent.
However, a small account is the perfect way to start out, focusing on getting familiar with trading and developing strategies. I always test my strategies with tiny amounts thoroughly before investing larger amounts.
I believe that $300 strategies can be applied to $10,000, $20,000, $30,000 trades without adjustment.
Emotional trading and discipline is always a concern. Working with a small amount, then stepping up the investment and checking emotions could be a very good way to develop as a Trader.
If you have $100,000s you target 15-20% per year, but most people expose 100% of their capital to do it, we find it better to expose $1,000 at compounded rates so the markets don’t have any exposure, you generally don’t want to risk more than 5% per trade on an account unless it’s very small and you can compound at 1,000% and above, which no one here can do but the prop guys I know can.
Often when a trader trades on a small account, he does not respect the risks because he does not want to receive very small profits if he traded according to the rules of money management. Therefore, such accounts are quickly lost. For example, the broker where I trade (at fxopen) has the opportunity to open a small deposit of $10, but I don’t see the point in this. To trade on such a deposit you need to use a huge leverage, and this leads to an overestimation of risks. Most likely the deposit will be lost… Small deposits are very inconvenient, they are not for comfortable trading.
