How to Manage Risk with a Small Trading Account
Trading a small account vs. a larger account requires you to make some adjustments. Especially when managing risk. Risk management is the most important aspect of survival and success as a trader.
These adjustments are key for the longevity of your career, and stable growth of your account. Not only do you have to make changes to your sizing and risk management, but you also will have to make subtle changes to your strategy.
If you are under PDT (less than 25k in your account balance), your goal should be to take every day one by one. Slowly but surely you should be aiming to grow your account, not all in one jump.
Today, we wanted to break down our top tips for managing risk while trading a small account.
Don’t Overextend Yourself
Don’t try to bite off more than you can chew. And by that, I mean don’t try to scale your account too quickly by taking on massive size. This is a marathon, not a sprint. Start small, get your feet under you, learn your strategy inside and out, and grow the account day by day. Growing a small trading account allows you to grow your trading skillset and get experience without risking a ton of money.
Live & Die By 1:2 Risk-To-Reward
Your risk-reward profile on a small account is your life-blood. You will live and die by it. If you aren’t building the habit from the start of your career while you’re trading on a small account, you will never trade a larger account properly.
So, as a set rule, every trade should have the potential to make 2x more than what you risk. That will always keep you on the right side of the growth of your equity curve. Look how easy it is to be profitable if you can live by that:
Trade LESS
Less is more in trading. With a small account, you have to be selective with the setups you take. You have limited ammunition to deploy into the market and a limited amount of money you can risk, so taking A+ setups is the key. Make sure it is a high-probably setup that you have tested or traded before, and fits your risk-reward criteria to a T.
Trade Stable Stocks
Your small account is your precious resource. Protecting it at all costs is crucial. So, if you are trying to protect your capital wisely, do you really want to risk your money on crazy stocks with micro floats that could trap you at any moment? Look to trade slightly higher float stocks with smaller ATRs at first, gain the confidence you need, and slowly progress into more volatile stocks as your account grows.
If you want to check out some more tips and guidelines on managing risk, click below to watch our YouTube video that expands on these topics and more!
Master 1 Set Up
The more types of setups you take when you have a small account, the more likely you are to lose. You only need to master 1 strategy to grow a small account, and keep your risk under control. This will also make sure you are trading less, and help you avoid the overtrading trap. This is especially important if you are trading an under PDT account in the US.
Last Chance to Take Advantage of Black Friday Discounts
Click Here to Access The Discounts
The post How to Manage Risk with a Small Trading Account appeared first on Bulls on Wall Street.
Source: https://bullsonwallstreet.com/small-trading-account-risk/?utm_source=rss&utm_medium=rss&utm_campaign=small-trading-account-risk
Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.
"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world. Anyone can join. Anyone can contribute. Anyone can become informed about their world. "United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.
LION'S MANE PRODUCT
Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules
Mushrooms are having a moment. One fabulous fungus in particular, lion’s mane, may help improve memory, depression and anxiety symptoms. They are also an excellent source of nutrients that show promise as a therapy for dementia, and other neurodegenerative diseases. If you’re living with anxiety or depression, you may be curious about all the therapy options out there — including the natural ones.Our Lion’s Mane WHOLE MIND Nootropic Blend has been formulated to utilize the potency of Lion’s mane but also include the benefits of four other Highly Beneficial Mushrooms. Synergistically, they work together to Build your health through improving cognitive function and immunity regardless of your age. Our Nootropic not only improves your Cognitive Function and Activates your Immune System, but it benefits growth of Essential Gut Flora, further enhancing your Vitality.
Our Formula includes: Lion’s Mane Mushrooms which Increase Brain Power through nerve growth, lessen anxiety, reduce depression, and improve concentration. Its an excellent adaptogen, promotes sleep and improves immunity. Shiitake Mushrooms which Fight cancer cells and infectious disease, boost the immune system, promotes brain function, and serves as a source of B vitamins. Maitake Mushrooms which regulate blood sugar levels of diabetics, reduce hypertension and boosts the immune system. Reishi Mushrooms which Fight inflammation, liver disease, fatigue, tumor growth and cancer. They Improve skin disorders and soothes digestive problems, stomach ulcers and leaky gut syndrome. Chaga Mushrooms which have anti-aging effects, boost immune function, improve stamina and athletic performance, even act as a natural aphrodisiac, fighting diabetes and improving liver function. Try Our Lion’s Mane WHOLE MIND Nootropic Blend 60 Capsules Today. Be 100% Satisfied or Receive a Full Money Back Guarantee. Order Yours Today by Following This Link.
