Forex Trading Tips for Small Accounts

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#572: Forex Trading Tips for Small Accounts

In this video:

00:29 – How to trade professionally if you have a small trading account?

01:06 – Dangers of gambling instead of trading.

02:05 – Understanding correct money management and having a strategy.

04:15 – You now have the skills to be able to trade.

05:18 – Trading on a Prop Firm account.

06:13 – Final video and podcast for 2024.

06:51 – My 17 minutes Masterclass.

07:07 – Book a Call with us.

07:13 – Blueberry Markets as a Forex Broker.

07:25 – Happy Christmas and I’ll be back in 2025.

I’m going to talk about how you can trade successfully if you only have a small live trading account. Let’s talk about that a more right now.

Hi there, Traders! It’s Andrew Mitchem here at The Forex Trading Coach with video and podcast number 572.

How to trade professionally if you have a small trading account?

I want to talk about a topic that affects a lot of you out there. And it’s all about how do you trade properly and professionally. If you only have a very small trading account, you see, the issue is that a small account, depending on who you are and your financial circumstances, may be a lot of money for you. And you become nervous. You’re not sure, how to trade. You’re fearful of losing money and you feel it’s not a sufficiently big enough account to make any sufficient and realistic money out of that account.

Dangers of gambling instead of trading.

On the other hand, you might be looking at trading, and you might find that a small account just play money for you. The danger of that is that you’re likely to do something really silly, and you’re likely to not understand risk management, and you’re not likely to calculate a lot sizing correctly, or you’re just going to gamble the money, or you don’t care about stop losses or for trade on forex trades opened over a weekend, whereas maybe your strategy says to shut those trades, you might over trade and take too many positions. And so depending on which side of the of the equation you’re at, the issues in some ways are still the same, because a small account can be hard to trade and to make what you call substantial gains on in terms of realistic monetary value. However, it’s very important that you trade that small account as though it was a larger account size.

Understanding correct money management and having a strategy.

It’s really important that you understand money management. Now, that account might be such a small account that the only thing you can do on your forex pairs is to trade 0.01 lots, and you may not have a big enough account to have really accurate, lot sizes. However, if that account is small, just trade 0.01 lots. Trade the absolute minimum lot size that you can.

The other thing that you really need to, get correctly here is a trading strategy. You know, just because you might have a lot of money and you’re just putting $500,000 in the can in this kind of play money, you’re probably going to end up losing it.

Or you might gamble in flukes and lucky trades, but without that strategy and that understanding of how you trade in the first place, you’re kind of not doing yourself any favors. Likewise, if that small account is a fortune for you. Get yourself educated first. Either way, you have to have a strategy that you thoroughly understand and have confidence in.

You have to have trades that have high reward to risk so that you can make substantial gains. But also it’s really important. Let’s say you had $1,000, right? And let’s say that over time you made pick a figure $200 on it, and it might have taken you six months. The issue that you have there is that someone’s going to go, Andrew, I just made $200.

It’s taken me six months to get there. This is ridiculous. But don’t do that. That’s a common mistake if you want to trade properly. Think of it the other way around. Think of it as I’ve just made a 20% return in six months on a live account. Now, yes. Realistically, that’s $200. And you go, wow. Yeppy! I can’t live off that.

No, of course you can’t. But you can make 20%. And with your strategy and your skills, you’ve just learned how to make 20% in six months. You know, that could easily be 30, 40, 50, 60% in a year.

You now have the skills to be able to trade.

Now you go out there into the real world and find too many places where you can make that sort of money as a return.

But not only that, you now have the skill of knowing how to do this. And that’s the crucially important bit that people underestimate. And people forget. They just look at the $200, they don’t look at the 20%. So if you can do that and you have the skills to do that, you’re small account is almost irrelevant and does not matter.

And that’s the point of this video. Just because you might only have $500 or $1000 to put into a live account. Don’t think I can’t trade or don’t think it’s pointless me even starting. Invest in the education in yourself to learn how to do this properly. Because if you can and you can make those sort of returns we just talked about, you can either potentially increase that account one day.

You may or may not be able to trade for other people or family members, if that’s possible, depending on where you live and circumstances.

Trading on a Prop Firm account.

But also, as you’ve heard me talk in the past, we have an opportunity now to use prop firms. Now, if you make 30, 40, 50, 60% in a year with low drawdowns, you’re going to do very, very well by trading through a prop firm.

And again, without sounding like a broken record. The important thing is, is to educate yourself first, have a strategy that you understand and believe in and know, and then your small account doesn’t matter. You’ll make great returns long term. Start small. Learn how to do it. You’ll make the returns if you do it the other way round. And you just rush in and you’re going to make, you know, think you’re going to be sitting on a beach or driving red Ferrari and doing dumb things and gambling.

Trading realistically is not for you or you’re not going to last. So treat it like it’s real because it is real. It is a business and that’s how you will succeed long term.

Final video and podcast for 2024.

Now, I just wanted to also say thank you for being here. Thanks for your support, for watching, for listening throughout 2024. And obviously under the previous 15, 16 years prior to that.

This is my last video for 2024. So and we’re taking a break over Christmas and New Year. So I just wanted to say thank you, for bei