So, you’re ready to begin trading, you have opened a small trading account with a trading company or broker and now want to bring in the profits. But how do you make lots of money from a small trading account?
A small trading account limits how much money you can put into a trade. In contrast, on larger accounts you can put more funds into a trade, creating a larger opening position, resulting in bigger potential profits (and losses). A small trading account does, however, deliver profits that are still worth working towards.
A small trading account is the ideal position from which to make slow, steady gains. For those with the patience and who prefer their trading with a little less volatility, a small trading account, full of long-term investments, is one of the safer options. The great thing about a small trading account is that it won’t allow you to enter the market with huge sums of money only to lose them all at once; if you have a £2,000 account, you can only lose up to £2,000.
It is misconception that a small trading account will hold you back. Whatever size your account is, putting in the research, studying the markets and learning how to read market information will make far more difference to overall profits than size of your trading account. And it is always good to remember that, given the nature of the markets, even those with all the information in the world can still get caught out and suffer losses.
A lot of the main advice for succeeding with a small trading account could apply to many other types of accounts. Do not be driven by potential profits or trying to recoup losses; study the markets intensely and make all decisions based only on beliefs about the market and its trends. If you are able to make your decisions in a rational manner, without letting emotions or instincts cloud your view, then you stand good chances of seeing a small trading account begin to grow.
A small trading account is useful for traders to test out a strategy, repeatedly, to see if it will continue to make them money. That way, strategies have been tried and evaluated, thoroughly, before they are used on more ‘high-stakes’ trades. In the meantime, if you have the patience to keep testing your tactics from a small trading account you could see that the hundred pounds or so you make each trade gradually begins to add up.
Once you have managed to accumulate a substantial amount of funds in a small trading account it is important to not over-leverage on this account, as you could lose money it took you a long time to accumulate very fast! Ultimately, the key to succeeding with a small trading account is mastering the practice of working slowly, perfecting strategies, understanding the markets and gradually make a significant profit. Traders who have started on a small trading account often benefit from the skills, discipline and patience it can demand. If you can put in the time, it should stand you in good stead for future trades!
Risk warning: Spreadbetting, CFD trading and Forex are leveraged. This means they can result in losses exceeding your original deposit. Ensure you understand the risks, seek independent financial advice if necessary. The value of shares and the income from them may go down as well as up. Nothing on this website constitutes a solicitation or recommendation to enter into any security or investment.