What are your trading goals? Do you want to start with a small account? If YES, you’re at the right place.
This post will give you A to Z information on handling the small account.
Many fresh traders want to start with risking low money. That’s why they choose micro accounts where they can start with even $1, $5, $10, $25, and so on.
Get through the answer quickly: How to grow a small forex account?
In order to grow a small account, set a low-risk reward ratio. Always follow the proper trading strategy and focus more on learning rather than making money. Don’t withdraw instantly and wait to increase your capital. Overtrading kills. Stay away from high leverage also.
Remember success is slow in this type of account. Do a self-analysis of your emotions? If you are the kind of person who gives up early, the small account is not for you.
Keep reading to know step-by-step details of growing a small account into a large capital account.
What Is Small Forex Account
By small forex account, it means a lower initial deposit requirement of $1, $5, $10, or $25.
According to the fact and figure, the smallest traded volume is 0.01 that represents 1000 units of the base currency. Such accounts are also named cent and micro types accounts.
The leverage factor makes this mini account challenge. Here you can’t risk more to earn more.
Below are some of the Major Issues with Small Forex Account:
- Low funds at the disposal
- Low chances to make mistakes
- Need To watch the risk-reward ratio carefully
- The small account grows much slower
- Small accounts are psychologically disturbing
How Do You Grow A Small Trading Account
Growing a small account is possible but it needs time and patience. Stay positive and don’t underestimate the value of a small account.
With every trade try to develop discipline for the next trade. The best idea is not to withdraw profit from the smaller account.
Most traders make 2 mistakes when dealing with a small account. They set their mind that they can’t make a huge out of the little sum.
That’s why they would really end up soon. Another mistake they make is to set high expectations with a small account and use leverage carelessly. This may wipe off their account in a moment.
They will not trade anymore. So be realistic!
Below is our step-by-step guide to growing the small account in forex, don’t forget to read.
Step by Step Guide to Grow Small Forex Account
Turning your low capital account into a large one is theoretically much easier than reality. But if you are consistent and you enjoy your passion for trading, you can do it.
Below are some must-read steps to follow:
Step-1 Set Proper Risk Reward Ratio
For beginners, it is vital to think about the risk-reward ratio prior to trading. With a small account, newbies should never risk more than 1% of their capital.
Yes, it would grow your account slowly. But it will keep you IN the trading game rather than OUT. So, it’s important to earn little but earn continuously.
When you think you have got enough experience to handle risk factors you can move to risk 2% of your average capital.
Step-2 Set Realistic Targets
Trading with $1 to $100 can’t bring trucks loaded with money for you. Never set high targets or high-profit ratios in your mind. It will make you greedier.
Do your math prior to trading and set your daily, weekly, and monthly profit target according to your set risk-reward ratio and number of trades per day.
Step-3 Stop Comparison
Don’t compare your small account with others. Every trader is different and learns the markets’ ups and downs differently. Stay content with your wins.
If you are impressed with other’s wins you may soon fall into the trap of impatience, greed, and frustration. It’s trading where your biggest competitor is yourself, not a third party.
Step-4 Look for Ways to Win Trade
Losing is a part of the game. Don’t give up if your 3 consecutive trades are losing trades. Learn what makes you lose every time and try the next trade without repeating the same mistake.
The experience you may get in this way is more valuable than your loss.
Step-5 Follow Your Trading Plan
A trading plan is something that will tell you
- Which pair you will trade this week
- At what time you will open the trade
- What will be your way to trade
Ask yourself these 3 questions and make your mind clear about the answers. Stick to the plan if you find yourself comfortable with it.
Step-6 Focus on Series of Trade
Trading with smaller amounts is not only focusing on trade but also on series of trade. Every single trade is important and helpful to determine your success.
Focus your energy on learning how to trade rather than making money. Your greed will force you to try shortcuts. Soon you will quit trading.
Step-7 Be Careful About Overtrading
Overtrading is not the way to make money fast. Instead of an overtrading focus on good trades. You would try to be overdefensive or offensive in your approach.
In turn, the fear of missing out will overcome you. This will make you lose quickly. Don’t exceed more than 12trades depending on your capital.
Step to Follow When You See Your Account Growing
When you see your account growing, make certain changes in your thought. It’s better to plan everything prior to trading rather than sudden changes.
Suppose you have achieved your goal, what should be your next step to follow. Let’s see:
Set New Profit Targets Monthly
When you successfully achieve your daily targets, set your monthly targets. Also, decide what you will do with your profit.
There are 2 options: withdraw or reinvest. If you want to grow your account you would never go in favor of withdrawing unless you grow your capital you decided.
Decide When to Withdraw the Profit
Don’t withdraw instantly if you wish to grow your account with the compound plan. Reinvest a part of your profit or full profit to increase your capital.
Some traders withdraw a small amount weekly to get motivation. It’s good practice. Smart traders never withdraw until they get decent capital.
Top 3 Mistakes You Need to Avoid to Grow Small Account
The main problem of small account holders is how to quickly grow their accounts. To make it grow quickly, they often lose the right track.
Below are 3 mistakes every trader must avoid growing small accounts:
Lack of Strategy and Proper Trading plan
Buddies join the trading world with full planning. When to trade, what to trade, how to trade must be clear in your mind.
Using High Risk or Leverage
Stay away from high leverage if your account is below$500. When you get enough grip on risk management you can use low leverage according to your capital.
Failure to Control Emotions
Greed, fear, and frustration are common emotions that can trigger you in trading. Do practice developing patience in a demo account before moving to real money.
How Do I grow $10 Forex?
To grow a $10 forex account, stay positive. Don’t give up learning. Follow the right trading strategy and set a low risk-reward ratio. It’s a better idea not to overtrade. Don’t focus much on losses and try to find ways to put win trades.
Can I trade with $20?
YES, you can start trading with $20. It’s better to trade with a small amount as a beginner. However, it’s hard to make a high profit out of low capital. Keep this account for learning purposes.
To conclude, I would say, the right meaning of growing a small account is actually growing experience, patience, and consistency. Account growth is a matter of slow and steady wins.
Theoretically, it seems easy to run a micro account. In reality, it’s challenging to grow the capital account.
Most traders give up and move to funded accounts in order to earn more. Only those traders who enjoy trading love trading on a small account.