Don’t Leave Money on the Table: Invest Some of Your Receivables in a Trading Account
Everyone
thinks without having a big trading account it’s not possible to earn money. In
the past, this statement was true to a certain extent but things have changed a
lot. People have access to leverage trading account and the elite traders in
Singapore are making millions of dollar profit by using a small investment. But
having a leverage trading account at Saxo doesn’t give you the guarantee that
you will make millions of dollar profit. You need to learn the art of trading
the small account.
Before
you start learning the details of trading the small account, you need to
understand the problems associated with small-sized trading capital.
Problems of small trading account
Using
a small trading account forces you to trade with high risk. Most of the time traders
are not happy with the profit factors since they can’t afford to increase the lot size. Eventually, the naïve traders become frustrated and
start trading with high risk to earn more money. Things might work well but
when the traders lose few trades in a row, they start losing confidence and
eventually lose their entire trading account. On the contrary, the traders
don’t have too much back up to use wide stop loss for the trade. To be precise,
they are using the day trading scalping method to secure daily profit. And
these two trading strategies are the most complicated trading method in Forex.
Without having extensive skills and trading experience, you can’t expect to
deal with such a strategy.
So, what should we do?
Since
trading the small account has many problems, you need to find a simple
solution. Try to come up with a unique idea by which you can use the leverage
and start executing big volume trades in the Forex market. Instead of using a traditional strategy, you
have to educate yourself about the price action trading method.
Price
action trading strategy might be tough but do have the liberty to use the
practice account. Start trading the critical levels in favor of the trend by
using the price action signals. Instead of memorizing the candlestick pattern,
try to correlate the price movement and the pattern of the candlestick. Once
you start to know the difference between the bullish and bearish price action
signals, things will start to make sense.
Develop a precise trading method
To
trade the small account, you need to have a very precise trading method.
Without having a precise trading method, it’s really hard to recover the loss.
Moreover, you will be trading the market with the help of the leverage trading
account and this might result in a big loss. Always remember, a single movement
can make a great difference when you will trade with a high lot.
During
demo trading, you should maintain a small trading journal so that you can find
the weakness in the trading system. Find the faults in the strategy and fix
those issues. Try to come up with a unique idea so that you can make a big
profit without taking too much risk. And the strategy should be crafted in such a way so
that you never feel stressed at trading.
Global economic news
Those
who small trading capital, should never try to trade the global economic news.
Though fundamental factors can give you a unique profit-taking opportunity, you
have to think about your equity. The market becomes highly volatile on such
events and it becomes nearly impossible for the retail traders to predict the
price movement. Even if you trade with a big balance, chances are high you will
not be able to make a profit at news trading.
So,
stop testing your luck by trading the major news with a small trading account.
Learn about the different trading sessions so that you can pick the trading
asset when the market is relatively stable. Last but not the least, don’t
become too aggressive to find good trades to increase the size of your capital.
