Infomediaku.net | How to Grow a Small Trading Account in These 4 Easy Trading Strategies
For those of you who are new to the world of forex trading, it would be nice to try it first with relatively small capital. This is so that you can take experiences and knowledge that will be useful for later when trading with large capital.
It is better to make more mistakes when using small capital so that it can be used as an experience when using large capital later. However, it would be even better if you can minimize the errors that occur.
4 Trading Strategies Using Small Accounts
In this article, we will tell you about how to grow a small trading account
with several strategies that you can follow.
1. Choose a Suitable Broker
The first trading strategy on how to grow a small trading account is to choose a suitable Broker. To start forex trading with a small account, of course, you have to find a that accepts low deposit accounts.
There are already several forex brokers who accept a minimum deposit of $100, but of course, you also need to look at the security of the broker, starting from its reputation and regulations, so that your account is safe.
2. Consider Leverage Wisely
Leverage is useful for those of you who want to trade forex but have a small capital. Without leverage, you will not be able to open a forex account with a deposit of only $100, unless you are trading using a cent account.
In fact, many forex brokers can offer low minimum deposits because they adjust for high leverage.
So suppose you only have $100 in the capital and use maximum leverage of 1: 1000, then the tradable volume will be doubled to $100,000. That way, you can open up to 100 trading positions each measuring 1 micro lot.
However, the existence of large leverage does not mean you can make transactions without paying attention to risk, the rule “leverage is directly proportional to risk”. Even if it is supported by leverage, the margin taken from the $100 capital will quickly get depleted if the price moves against your position.
For that, deciding the level of leverage must be done very wisely. The size of the trading volume that is too high due to leverage will only give an illusion of how to trade forex with small capital.
Related : How Forex Works – Start to Earn Guide
- You seem to be able to open positions with large sizes, even though you have very little capital resistance. In order for the way to trade forex with small capital to remain safe, choose the ideal leverage that does not plunge you into a high-risk forex strategy.
- Focus On Trading Planning And Strategies That Have Been Made
- The problem experienced by many traders who have relatively small accounts, they are focused on how to get large profits in a short time for various reasons. Usually, the smaller the account balance, the more afraid a trader will lose.
- By focusing on the profit you will get, then you will pay less attention to the trading strategies that you have implemented, so most likely you will not be able to implement the trading plan maximally.
- All you need to do is focus on strategy and money management according to an effective trading plan and strategy. Profit or loss is the output of implementing your strategy. If you have been able to succeed on a demo account, you should not worry when trading on a real account regardless of the size or size of the capital.
- Adjust the Trading Lot.
- When you make a transaction, you have to pay attention to the size (lot) of the trade you are using. Size (lot) is the most important aspect in forex trading with small capital.
- The micro lot type is often the go-to choice, as it only measures 1,000 units of currency. This is of course different from standard lots which contain a volume of 100,000 units of currency.
- You need to know, minimizing trading lots not only allows forex trading with small capital but also eases your psychological burden and the risk of loss when market conditions are not on your side.
- Tighten the Risk-Reward Ratio.
- The use of money management is a very important component in forex trading. By managing good money management, you can make long-term plans to defend your account from large losses. So even if you trade forex with a small capital, your trading funds will be able to survive.
- One of the recommended money management tips in forex trading with small capital is the use of the risk-reward ratio. Here, you can adjust the ratio on a small scale, such as 1: 2 or even less.
- The reason is to anticipate erratic price movements. Oftentimes, it takes longer for the price to reach the take profit than the stop loss target.
3. Minimize Graph Time Frame
Price movements in forex trading are divided into several time frames, where each chart represents a specific period.
The principle that you can pay attention to here is, the higher the trading time frame, the wider the range of price movements you are observing.
In order to get the ideal range for forex trading with small capital, use low time frames such as a minute or hourly charts (1 hour and 4 hours).
4. Creating a Trading Journal or Record
By keeping a trading journal or record, you will find out the track record of the trades that have been made.
In the future, it is hoped that you will be able to find out the mistakes that have been made so that you can evaluate and correct them.
Apart from that, it can make you more disciplined and confident whether you are trading with a large or small account.
Even if you trade on a small account, having fundamental and technical analysis skills is still necessary to become a professional. Reading news about the forex world and understanding the use of various indicators can be useful provisions for future trading activities.
That’s the discussion this time about how to grow a small trading account that you can try. Good luck.
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