One of the most interesting things about forex trading is the fact that you can grow. Not just can a trader grow in skill and mastery; growing an account size is also a novel task. Yes, growing a Forex account can be adventurous and tasking at the same time. In this article, I am going to be sharing how to grow a small forex account in 2024.
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How To Grow a Small Forex Account in 2024
Forex trading comes with its own fair share of challenges. Losing money or not having sufficient funds in a trading account is one of such challenges. Being a profitable trader of many years, one of the discouraging factors for a trader is not having enough money to fund accounts. However, does insufficient funds contribute to success or failure in trading? Does sufficient funds contribute to trading proficiency and mastery? All of these questions have answers embedded in this article.
Forex trading needs a balanced psychology and a positive mind to attain a consistent profit.
Sufficient funds in a trading account do not determine mastery. However, it can contribute to the level of success or failure attained. Forex trading needs a balanced psychology and a positive mind to attain a consistent profit. While trading funds can be a challenge, one should focus on trading proficiency and mastering the skills. This is what makes a difference between two traders.
So, if you have been wondering how to grow a small forex account to a limitless figure, then this article is for you. As you go through each paragraph, may you find the secret of consistent growth in them.
What is a small Forex account?
Forex account is in sizes. Some are two figures, some three, four, five, six etcetera. Not minding the figure, one of the most important things a trader needs to know is ‘Is my account small or big in size?’
Defining or classifying a forex account is quite an ambiguous task. This is because what seems like a small account may be a very big account to another. Conversely, what seems like a big forex account may be a very small account to another. Therefore, to be on the safe side, it is better to define it using measurable examples like a demo account size. So, I define a small forex account as any account that is less than the least amount in a demo account. This definition is subject to what a broker offers as the least amount for demo trading. So, if your broker offers 1000 USD as the least amount for demo trading, an account that is less than 1000 USD is a small forex account. More so, an account that is up to the least demo account size can be called a big Forex account.
Using a demo account size as the index for defining a small account is quite a worthy example because that is where every trader begins. We all began as demo traders and as such having a real trading account size like that of a demo is a worthy feat. However, what happens when your account size is small? You grow it and that is the basis for this article; How to grow a small forex account.
Over the years, I have seen people grow two-figure accounts to seven and eight figures and it is always a beautiful thing to know that you can grow your account no matter the size. One of the biggest testimonies I have held unto is that of Robert Booker. In one of his videos, he shared a testimony of ow he grew a few thousand-dollar account to over 10million USD. I heard his testimony and that changed everything about how I saw my forex account. From there, I listened to his video on the magic of small gains and that further strengthened my believe that your account has the potential to grow. Since an account can be grown, let us consider how to grow a small forex account in 2024:
What profitable strategy must a trader use for trading small accounts
A profitable strategy is one of the most confusing decisions for many traders. The inability to decide on a particular trading style has kept many traders on a cycle of doom (a cycle of continuously seeking a holy grail – something that does not exist). This goes to say that there are many profitable trading techniques such as pure price action, trendline trading, market imbalance, moving averages, Bollinger Bands, Smart Money Concept (SMC), Demand and Supply, Online Trading Academy (OTA) style, Charts and Patterns, Elliot Wave, Wyckoff etcetera. All of these, and many more are profitable forex trading strategies and none is superior to another.
Therefore, deciding to stick with one of these trading styles, and mastering it makes a big difference in trading. This is where the trading breakthrough begins – sticking with one trading style and mastering it. So, which of these trading strategies can I recommend to you? I would recommend you begin with pure price action. This is because it holds the foundation of every other trading style. Mastering it can be very helpful in growing a small account size.
A strategy of choice is very important in growing a small account. This is because, it defines your analysis, entry and exit points. More so, it determines if a trade taken can be a swing or day trade following its rules. So, in growing a small account, always stick to a strategy that you have chosen and mastered.
What should I do to avoid losing trades in a small account?
This is the greatest fear of every trader – losing money. However, there is no trading strategy that is loss-proof. However, losing a trading account is not a good exercise. Therefore, to avoid losing your trading account, do the following.
1. Do not overleverage or underleverage your trading account
Overleveraging is simply trading a big lot size compared to the equity size. When a lot size is bigger, such that it does not leave room for a certain level of drawdown, the account is close to being lost. Thus, to avoid losing your account, trade favourable lots, and favourable positions and secure profits made.
One of the measures I use in knowing an overleveraged trade is when the margin percentage is less than 500. Once I see it, it is a signal that the trade is getting too close to a margin call. However, underleveraging is as bad as overleveraging. This is because it does not encourage a healthy form of trading. Profits made are in bits against a defined expectation. For that reason, a trader must learn how to use leverage to his advantage during trading and maximize that as one of the secret routes in growing a small account.
2. Avoid trading markets with high-margin requirements
Margin is simply a down-payment a trader makes when he/she takes an open position. Margin is so important because it defines how much trades can be made per account size. For instance, a standard lot may require a margin of 30 USD, depending on the broker and market traded. Assuming a trader has a two-figure account of 100 USD, with a margin of 30 USD, the free margin left for trading is 70 USD. This implies that a trader has only 70 USD to sustain his running trade and possibly add another trading position. From this 70 USD, a trader knows that he needs only seven pips or 70 points to blow up such an account. However, a market that has a margin of 10 USD for a standard lot is better for a 100 USD account as compared to the market with a 30 USD requirement. With a margin of 10 USD, a trader has 90 USD to hold onto his running trades and also add to it.
The price margin for every open position varies per market, per broker, and per lot size. Thus, trading markets with lower margins help to give more leverage for sustaining open positions and more trading allowances during drawdowns, more trading positions during winning positions, and more relaxed trading decisions.
3. If you are a patient trader, look for less volatile markets
Personality has a lot in determining how successful one is in trading. Usually, patient traders are those who can bear with slow market movements and can also allow their trades to run for a relatively long period. A market with a moderately volatile movement makes room for the trader to re-evaluate his trading decisions. Conversely, if such a trader decides to trade a market with high volatility, such may not give enough opportunities for trade re-evaluation. As such, they may lose the account.
In growing a small forex account, a patient trader should focus more on markets that are less volatile in movement and maximize the opportunities through multiple trading positions there. For synthetic indices traders, markets with less volatility include Volatility 10, 25, 50, 10, and Volatility (Is).
4. If you are an aggressive trader, focus on highly volatile markets
This point looks like a symmetry of point 3. it allows traders with different personalities to maximize different markets. While patient traders should focus more on trading markets with reduced volatility, I always suggest that aggressive traders should focus more on markets with high volatility and trade there. This is because aggressiveness comes with the rush of speed. Hence, in growing a small forex account, an aggressive trader should focus more on growing the account with a minimum lot while capitalizing on market speed. Highly volatile markets in synthetic indices include Volatility 75, 100, Volatility 25 (1s), 50 (1s), 100 (1s), Jump indices, Step index, Boom and Crash etcetera.
5. Stay with one to three markets
Everybody has a market that is their soft spot. In growing a small forex account, it is advisable to focus on markets that are of specific interest to a trader. One of the reasons people blow up their accounts is because they jump from one market to another. Issues surrounding multiple market trading is that it robs a trader of understanding the unique characteristics of a particular market. Hence, when growing a small account, it is pertinent that the focus should be on a market (at most three) that aligns with individual personality and interests.
6. Define your expectations
By expectations, I mean trading goals and objectives. One of the ways of growing a small account is by focusing on achievable targets. By this, I mean, focus on reducing multiple trading options and increasing good trading moments by filtering trades that are smooth, trending, and easy to capitalize on. To do this, always remember that you do not have to trade daily. So, when there is an opportunity to maximize a trend, do so.
To add, I will suggest that you work with a plan. Make your trading risks fixed. Define your trading conditions objectively, define your trading targets (take profits) objectively, and maintain dynamic trading goals. This way, you will grow the account steadily and consistently.
For me, I have a trading plan for growing a small account. Further details can be reached through the email address.
Do not follow the popular opinion
This is one of the most important decisions you have to make. Public opinion is so powerful that it can take years before you get rid of this noise. One of the most important public opinions that I discarded is the 90 – 90 – 90 rule which says that 90% of traders lose 90% of their equity within 90 days of trading. As much as this has been a public announcement for many years, there is an iota of lie in it. Think about it. If the 90 – 90 – 90 rule exists, why do new brokers and many more traders jump into the forex market daily? There must be a reason for their decision. Moreso, why is it that old traders tend to let go of other jobs once they find forex trading? It must be that there is a certain level of profiting that is in forex trading. For that reason, if one is to grow a small account, one of the public opinions to discard is the issue of risking not more than 1% of your account.
Imagine having an account size of 200 USD. One percent of 200 USD is 2 USD. How is this realistic? What I often advise is, to be skillful in your trading such that you know what works and what does not. In the forex market, there are no rules. Everything that seems like a rule is just a guideline with a flip side. Hence, master your skills and grow your principles.
Growing a small account is a very tasking and adventurous endeavour that requires patience and understanding of oneself. Considering some of the issues addressed in this article, I trust that by following factors such as understanding what a small account is, the profitable strategy to use in growing a small account, factors to avoid when trading a small account and disregarding public noise, one will be able to grow a small figure account to any endless limit desired.
In addition, as much as it is important to have good trading funds, knowing how to grow a small forex account comes with a certain level of proficiency. For that reason, one should focus more on trading with personalized rules and not with public opinions and also learn to be patient while executing trades based on one’s personality (either aggressive or patient trader).
If this publication has been helpful to you and you desire to know more about what it takes to be successful in trading, kindly do the following.
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