Small Account Challenge to Improve Your Trading

Mind Over Markets

In today's episode, I talk about taking a small account challenge to get my discipline and confidence back as a trader. I will also share with you some signs it might be time for you to take a new account challenge, and finish off with some tips for growing small accounts. No matter what stage of your journey you are on, this episode is designed to help you. I started on October 11th (made a mistake in the recording saying I began on the 15th) with $464 USD and turned it to over $11,000 USD in under two weeks. I will share the statements on this as well to give you a deeper look. Here was my plan.

• Execute only high probability trades
• Get in with conviction, get out early when you have the profit - take it and run
• If I lost just $164 USD, which is just 3 points on ES, I’d be out of margin
• I would then flip to micros, and work the balance up until I can do one ES
• Repeat this process until I build some cushion, then scale up to 2 lots, etc

The goal of this was:

1. Get back to the basics
2. Get back to experiencing what it’s like to have little room for error
3. Reconnect with myself when I started this journey
4. Build up my discipline
5. Focus just on the process, eliminate the profit obsession - not matter what happens, it was gonna be small - and that felt reassuring
6. Inspire others that their small account, is not small at all - and big things are possible
7. Make $1,000 USD a day with this small account once I hit $2000 balance

The results:

• Started with $464 on October 15th, 2021
• Grew it to over $11,000 by October 27th, the date of this recording
• The goal was always to get to $10K at least, then re-assess
• I hit the landmark, and I’m considering if I should stop here
• Or keep working this account until it hits my regular account size

Here are some signs that could suggest it is time for YOU to try a new small account challenge:

• If you are having big green days, but paying a lot more in commission
• If you are using your size to get out of trouble on bad days often
• If you find that you are obsessions over profit, and “NEED” to make certain targets
• If you are trading outside of your plan, and it’s working for now
• If your discipline is slipping, but you’re still doing okay
• If you’ve really lost it, and in a rut of a losing streak
• If you are super stressed out or burned out, and just need to take a break
• If you have had a life changing event and want to get back into the groove
• This is basically like a cool down, or warm up lap on the track

Tips for Growing a Small Account

• A small account is not an insignificant account, with the right attitude and strategy, it can grow much quicker than YOU even think
• At the beginning, when you’re dealing with contributed capital, scratch your way out of losing trades before they hit full stops - you can always try them again
• Take profit when you have it, even if it looks early - always get paid
• Review your performance metrics, but NOT total profit, who cares, it’s gonna be small, focus on more rounded performance metrics (EP 93 - Performance Metrics You Need to be Using)
• Never yolo or swing for the fences, when you trade small you can’t afford to trade big, ever
• Don’t be afraid to scale up your position size, but have a target first - for me I went to 2 lots when I hit $1000, and 3 lots above $2,000 account size. Then I scaled up.
• Have a position size reduction threshold, if you lose 50% of the profits since you started, even though you are trading small - gear down more, go to micros if you have to
• ALWAYS FOCUS ON PROCESS, if you find yourself gawking at the profit, stop trading
• End a losing day quickly - if you are down, or feel like you’ll be down, trust your instinct and don’t trade anymore
• Learn to protect what you got, not chase what you don’t

Here are some of the statements from my small account journey:

The first image below is the first 4 days of the challenge. I was lucky enough to start with decent volatility and was able to take some great trades on day one, which got me started on the right foot. Again, part of this is luck regarding the market conditions, but I give credit to myself for stepping on these conditions and taking advantage. I was trading really well in the first few days. And the second screenshot is a brokerage statement from AMP, when I decided to close out the challenge after exceeding the initial goal of $10,000 - quicker than I expected, but I had gotten the learning lessons I was hoping for. Also, I was ready to go back to trading slightly bigger as we had some great economic events coming up that would present some amazing volatility, and ultimately opportunity. Here are the performance stats from Sierra Charts for the small account challenge, spanning the entire period - cumulatively and excluding commission (broker statements above included commission): Resources

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