Many small foreign exchange retail investors have an idea that one of their disadvantages is that their initial funds are too small. If they have enough funds to trade at the beginning, they will definitely succeed. For this idea, my evaluation is, wrong, wrong, wrong! This is just your illusion, and the amount of money has nothing to do with your success.
Many people think that if the trading capital is large, they can bear more losses and have more trading opportunities, so that they can make quick profits. If you only consider trading for a few days or weeks, traders with strong funds may make more money than traders with small funds. Sometimes they can make money just because of luck. At this time, the advantage of sufficient funds shows It came out: the larger the trading volume, the more profitable it is. But when looking at long-term deals, say a year or longer, the results are very different.
I hope you will keep the following sentence in mind. If you cannot achieve stable profits on a small account with small funds, you will also not be able to make profits if you are given an account with a large amount of funds. Having a lot of money doesn't mean you can quickly become a successful trader. The truth is, if you don't know what you're doing, you don't have a proven and profitable trading method and system, and an account with a lot of money will lose money faster than a small account.
I used to have this thought "If I have a little more money, I can take more losses, and the result will definitely be profitable. As an individual trader, how much money is too much? The foreign exchange market trades up to $5 trillion a day No matter how much money you have personally, it is a drop in the ocean. Long-term capital management company's billions of dollars will also disappear, and no amount of money will help.
To put it another way, let's say you think your $1,000 account is too small to make money. If Soros just threw $100,000 to an inexperienced person on the street to trade, would that person do better than you? If you trade for a few days, I believe he can earn more than you, but if you trade for half a year, it is estimated that he will lose only 50,000. If you often read reports about hedge funds, you must have seen some funds lose billions or even tens of billions of dollars. Don't they have enough money?
It is true that you have been able to make stable profits. If you have more funds, your profits may be more. If you haven't made steady profits, don't complain that you don't have enough funds.
If your current trading situation is still making money today and losing money tomorrow, don't think about "if you have more funds". On the contrary, you should be lucky that you don't have more funds to trade, because learning to trade with a small account is more beneficial than a large account, both financially and psychologically. Losing a small amount of money is better than losing a lot of money, unless you are a rich second generation who doesn't care about money. So when a newbie interested in trading complains that they don't have the money to learn to trade, I take it as a good thing, meaning they can avoid potentially huge losses. But the threshold of trading is almost non-existent. They can use very little capital to learn trading. For example, a foreign exchange cent account of 100 US dollars is enough to trade for half a year. The financial risk is minimal and they can also participate in foreign exchange market transactions without distinction.
Make no mistake, having little capital means you won't make a lot of money, even if your trades are mostly profitable. But you need to change your point of view. What you originally thought was to trade with more money to make more money. Now you should think about how to trade with limited money to make money to continue trading. Making money with limited money will prompt you to learn and improve your trading skills, and specify a trading plan and trading strategy that suits you.
If you still think less money is a problem, this is a problem. If you can't make a stable profit, if you are given more money, you will overtrade and take greater risks, because you think you can make money if you have more money. The result of this is that you will lose as much as you have.
Thinking must move from the money to the transaction process. If you want to make money, focus on the transaction process, not the money.
The advantage of trading small accounts is that the risk is small and the psychological pressure is small. The disadvantage is that it is easy to be boring, because you can't make a lot of money, so you remind yourself very much, focus on the process, and don't always think about money. Once you can make a stable profit, it will be a matter of course to make a lot of money on the day of your qualitative change.
If you have very little funds in your account, here are my two suggestions,
One is not to trade frequently, cherish bullets like a sniper, and be sure to pull the trigger;
The second is that the position should be small enough. Your purpose is to learn how to trade. Proper risk management will allow you to live longer. Limited funds should be traded for as long as possible;
Again, small accounts are really not a disadvantage, especially for novice, inexperienced, and traders who haven't made steady profits yet. More money won't help if you don't know how to trade. So learn how to trade first, focus on the method and process, don't think about how to get rich quickly, the less you think about it, the easier it may be to achieve.
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