There are traders in the market who have the luxury of starting their trading journey by opening a big forex trading account. However, most traders start their journey with a small forex trading account. According to a report by The Modern Trader, over 50% of new traders in the market deposit less than $500 in their first trading account.
Let’s not wait any further and look into the easiest ways through which you can grow a small forex trading account.
Easiest Ways to Grow a Small Forex Trading Account
1. Gain Live Trading Experience:
One of the best benefits that you can get through a small forex trading account is the experience of trading live. At first, you should start with demo trading to get accustomed and acquainted with the trading platform and understand the basics of trading.
However, look into switching to a real account as soon as you are ready, as it will help you understand how to control the perception of the market, which will ultimately lead to better trading outcomes. Traders need to minimize their emotions like greed and fear of the market, and this can be achieved only when you start trading real money and gain live trading experience.
2. Avoid Withdrawing from Your Forex Trading Account:
It is one of the most critical pieces of advice that will help you grow your small forex trading account. Avoid withdrawing money from your small forex trading account that you are trying to grow and earn profits.
You have to make sure that you keep all your profits and capital in your account and allow it to grow. When you show patience and maintain discipline with your small forex trading account, it will help grow the money in your account.
3. Do Not Overtrade:
Overtrading is when you open various leveraged trades with large sizes to earn more profits, which can also lead to high trading losses. When traders trade with small forex trading accounts, they often fall into the trap of overtrading.
Traders, who have a limited budget for trading and small account size, often try to compensate by taking over-leveraged positions. However, this is what a trading disaster looks like, and taking too much risk may lead to heavy trade losses.
4. Trade High-Probability Trade Setups:
Traders with small trading accounts cannot afford the luxury of trading ordinary and mediocre trade setups. So, it is in the best interest that you trade only when your analysis shows that the trade setup has a high probability of success. The analysis of high probability trade depends on your trading strategy.
However, also make sure that you have a proper process in the plan so that your trades are ranked from low probability to high probability setups. This process may include various factors like technical factors, fundamental factors, and data positioning factors that can help traders determine whether they have got the perfect trade setup.
5. Set Your Risk Management Rules:
One of the most important ways to grow your small forex trading account is by clearly defining your risk management rules. When you do not have a proper risk management plan, there is a higher chance that you will blow your trading account, irrespective of whether it is a big trading account or a small trading account.
When it comes to trading forex, the risk is inevitable, and it is the only thing that traders may have control over. Hence, you must ensure that you have a clear set of rules to reduce your losses and increase your profits. So, define your risk management rules as soon as you start live trading, as it will give you more experience.
Trading forex is not as complicated as it may seem, and it is rather a good experience when you do it with the correct guidance. A small forex trading account can be turned into a big forex trading account by making good trading decisions, a growth mindset, and the right risk management approach. You can follow the tips covered in the article to get a headstart in your forex trading journey.