A small forex trading account if managed properly can be grown into a profitable one. While the process is not very easy, it cannot be labelled as tough either. The only things you need are a lot of patience, perseverance and of course a truck load of disciplined determination.
There are many myths that surround the forex trading market and one of them is that the success of a forex trader is dependent upon the size of his/ her trading account. There could be nothing more erroneous than this idea. Let me tell you why I think so.
What Actually Constitutes Forex Trading Success?
Suppose a trader has a big account, funded with say 50,000 USD. But he knows nothing of how trading works and quickly loses the entire amount and gets his account wiped clean. Would you call this trader as successful?
Now on the other hand there is a trader who funds his account with just $2000 and he/ she consistently makes winning trades and the overall ratio of wins to losses is more and at the end of the month about $200 are registered as profits. This scenario keeps repeating for next 6 months continuously, raking in a total of $1200 in profits on just a $2000 account.
So now it is clear that success means consistently raking in profits in the long term race and it has nothing to do with the size of the trading account.
Focus on What Is Important
Many people who are trading forex have the right amount of money in their forex account but they do not know what is important and where they should be directing their focus to. Often newbie traders are focused on the money or the profits that they will be making in the future / want to make. This is a wrong approach because that is not where your mind needs to be.
You have to focus on the present / current situation, which means you have to focus on the market atmosphere and learn to analyze it properly if you want to rake in profits from it.
The main point behind this idea is that once you learn to focus your attention on the markets, you will automatically acquire the capability to grow your trading account from a small one to a large one by raking in profits and that is exactly what you term as being successful, isn’t it?
Think Big to Earn Big
Though the success of a forex trader has nothing to do with the size of their forex account, there is another important relation between the size of the account and the emotional condition of the trader.
Smaller the size of your forex trading account, greater is the feeling of anxiety that is associated with it. Small accounts rarely provide any leeway to make substantial profits. Your profits tend to get squeezed in between the narrow margins that you set for each of your trades.
If you had a bigger trading account for instance let us suppose you had about a million dollars in your trading account. You would make a sizeable amount of profits each month even if you decided to engage in fewer trades, isn’t that so?
So the trick lies in adapting your mind to consider your trading account as a million dollar account. This actually means that you need to focus on consistent profit making rather than running around risking your account in desperation to win trades.
Slow and Steady Wins the Race
You probably have read about the proverbial hare and the tortoise story where the tortoise won a race armed with nothing but sheer determination and consistency. You need to take some lessons from the tortoise if you want to grow your forex trading account despite starting out small.
Here are a few steps that could help you speeden-up the process:
1) Master your effective strategy
Stop distracting your attention on matters like money, account size etc. Just keep practicing and mastering your effective trading strategy that helps you reap profits consistently. Every trader uses a different strategy or set of strategies based upon their comfort level in recognizing them and putting them to good use while trading.
2) Develop a Trading Plan
Based on your strategies you will need to develop a good trading plan and once you develop it stick to it at all times. Once you get this done, make a habit of maintaining records of all your trades in a journal so that you can always go back and study each of your trades in great detail.
3) Getting More Funds
You can either choose to grow your account by enhancing it with the profits that you earn each month or if that is going to take a very long time because of the small capital, you can even try to source investors. Here your journal will come on handy in substantiating your trading skills.