If you are looking for a way to make more money, then online trading is a good place to start. It isn’t as time-consuming as most day jobs, and if you play it right, it can yield returns that will be well worth your time.
While it is possible to jump into online trading by investing a huge amount of money, it is always advisable that you start with small online trading account. This way, you will be able to make mistakes as you refine your strategies without necessarily getting a significant amount of your savings getting wiped out.
However, this does not mean that a small trading account has to always remain small. It is possible to grow it into an account that provides for a significant portion of your income. Here are some of the strategies that you can use to grow a small trading account.
Be consistent at taking small risks
It is true that if you take no risks, you won’t make any profits. In the online trading world, there are many stories of people who have taken significant risks and won. However, when you are starting out, it is important to remind yourself that these stories are usually exceptions. Furthermore, even for those who consistently make money by taking big risks, they usually have accounts that can absorb this risk. If they make losses, they won’t go back to zero.
When you are starting out with a small account, it is not wise to take the same risks as people with large accounts. They can be able to absorb the risks, but you can’t. If you take big risks and the risks you take do not pay off, you may lose all the money in your account and this may deny you the opportunity to trade the next day.
You should keep in mind that the aim of starting with a small trading account is to refine your trading strategies and to have practical experience as far as the rules of trading are concerned. As a result, the best way to get the most out of your trading account is to consistently take small risks.
Gradually increase your position size
After a few weeks or months of trading, you should be able to identify positions and strategies that work for you. Gradually increase your positions in what works while discarding strategies that do not work. Small increments are usually the best bet mainly because they help protect you from becoming an emotional trader. You should always keep in mind that the goal is to grow and to refine your strategies, and not to make big wins at the initial stage of your online trading journey. Doing this will prevent you from making mistakes that can lead to crippling losses.
Be mindful of your goals
Short term goals are usually useful because they help keep people motivated. However, when it comes to online trading, they can become detrimental. This is because setting daily goals can end up forcing you to make investments in low quality plays. This can end up costing you a lot of money.
As a trader, you have very little control when it comes to the opportunities that present themselves. Your role is to take advantage of these opportunities when you have a certain amount of confidence that they can be profitable. Being under the pressure of daily profit goals can make you act irrationally. It will also make your trading life miserable.
Long term goals are the most suitable. They will keep you focused without necessarily putting you under undue pressure. Furthermore, non-monetary goals like developing winning trading strategies, and learning the ins and outs of trading, can be more beneficial in the long run.
When embarking on your online trading journey, you should keep in mind that growing your account will take time and that overnight successes are rare. As a result, the patience to wait for the right opportunities, the discipline to take realistic risks and the willingness to learn, will be your best allies.