Growing a small account is possible, but it's definitely not easy. OctaFX has some useful tips to grow your account against all odds.

Deciding how much to invest in online trading is a problem that most beginner traders have. Some traders might start with $100 in their account, while others might invest more than $10,000 for their first trade.

There is no doubt that having a small account can be challenging. You might feel like a small fish in a vast ocean because the profits you make seem insignificant compared to the time and effort you put into your portfolio. However, this does not mean that you will be stuck in that phase forever.

In fact, starting small is actually a brilliant strategy in online trading. Since you're still a beginner, it's best not to take too much risk and focus on sharpening your trading skills instead. In this post, OctaFX shared some useful tips to grow your small account into a giant one.

How to grow your small account

 

The Truth About Having a Small Account

Before we proceed further, it's important to learn about the reality of having a small account. Starting small is great for beginners, but there are several things that need to be considered beforehand, such as:

  • Trading options are limited. The more you trade with a winning strategy, the closer you'll get to your expected results. So this means, if you're not trading enough, it might be more difficult to reach your goal because your results will tend to be random.
  • Trade expenses might be higher. Even if you have a winning strategy, your profit might still be insignificant because of slippage, commissions, and other fees. Not to mention that it's almost impossible to continuously get winning trades in the long term.
  • It'll take longer to master trading. One of the most effective ways to improve trading skills is to make mistakes and learn from them. You will eventually understand what works and what doesn't. With a small account such as the one in OctaFX, it's harder to keep that level of engagement because you won't be able to trade that often.

Growing a small account is possible, but it certainly won't be easy because in some aspects, the odds are simply against you. Therefore, it's important to set your expectations right from the start. Do not expect to make a million dollars in the span of a few months. If anything, you should be prepared to lose your entire account.

 

Define Your Risk Management System

One of the most important aspects to grow your account is to define your risk management system. Without proper risk management, there's a high chance that you'll lose more than you anticipated. Remember that risk is something that you have full control over, so make sure that you manage it well to reduce your losses and increase your profits.

It's a great idea to define your risk management as soon as you start trading on a live account. Most traders only risk less than 2% of the size of their account per trade. If you're just starting, you might even want to consider risking 1% or less and move up from there.

 

Be Consistent

Trading with small money and low-risk tolerance is one way to keep your balance safe, but it also makes the profit smaller. Thus, it might take a while to actually "feel" that your account is growing. One thing to remember is that growing a small account like in OctaFX is all about consistency.

Being able to make small, yet consistent profits is more valuable than winning one big trade and losing the rest. The key is to take a small amount of risk, then find a way to win a lot more trades than you lose. While it may seem that you're not improving fast enough, it's the most effective way to lay out a solid foundation for your future trades.

 

Prioritize Skills Over Money

Even with a good strategy, you can still lose a lot of money. This is normal though. Even expert traders lose money sometimes, so don't be too sad if it happens to your trades as well. Instead of focusing on the monetary rewards, it's better to just accept the results and focus on enhancing your trading skills.

Take your time to learn about trading as much as possible. Try out different trading strategies, indicators, and trading tools to see which one works for you. It is also a great time to evaluate and improve your strategy. Remember that even losing trades can give you important data regarding your performance. You can also use the opportunity to focus on specific elements of your trade in order to see how they work individually. When you break them down like this, it's easier to figure out where your issues are.

 

Gain Live Trading Experience

Apart from skills, beginner traders also need to gain live trading experience. Demo trading might be useful, but it doesn't trigger the same range of emotions as trading on a live account. You can only feel raw emotions like fear and greed once you start risking real money. Such emotions can make you lose control over your trade and lead you to huge losses. But with enough experience, you'll be able to avoid emotional trading by making rational decisions based on your initial plan. Luckily, OctaFX provides these benefits.

 

Use Compound Interest

Once you start making money, it can be tempting to cash some out to pay your bills or buy new stuff. However, if you want to grow your account, you might want to resist withdrawing your money and start compounding interest. This means, you basically add your profits to the next trade. Over time, your account will definitely see exponential growth as opposed to the modest growth had you only relied on opening trades with the same position size every time, which would result in slow, linear growth.

 

Only Trade with High-Probability Setups

To minimize the risk further, you need to be picky with your trade. Meaning, you should only open a position if your analysis indicates that the setup has a high chance of winning. You need to make sure that all the criteria are met before opening a trade. You can analyze the situation and find the ideal setup by using a checklist of technical, fundamental, and market sentiment.

 

Do Not Overtrade

When trading on a small account, it's very easy to fall into the trap of overtrading. This refers to opening several trades with high leverage, which certainly can lead to high trading losses as well. Traders with a limited budget tend to amplify their account size with overleveraged positions in order to gain huge profits. Unfortunately, this is a direct path to disaster. You need to be responsible with your risks and understand how much you can afford to lose.

 

Stop Comparing Yourself to Others

Lastly, it's important to understand that comparing yourself to others will only bring out jealousy, impatience, and frustration. Sometimes it's a great idea to read successful trader stories just to see how they work, but don't let it destroy your confidence and make you feel inferior. There is a reason why copying other traders' strategy is not a great idea because in reality, everyone has a different goal to achieve. You need to find the style that you're most comfortable with in order to be successful.

 

Find a Suitable Broker

There are hundreds of good brokers out there, but not all of them are suitable for small traders. Aside from the basic aspects like safety and regulations, there are other factors that you need to consider, such as:

  • Low Trading Fees
    First things first, you need to pick an affordable broker. Choose brokers that offer low minimum deposits and tight spreads. Also, make sure that the broker is reliable as it is transparent so you won't have to worry about hidden fees that might be burdensome later.

  • Demo Accounts
    Before you open a live trading account in OctaFX, it's a great idea to start with a demo account. Most brokers offer access to demo accounts for free, so it's very convenient for beginners. You can use demo accounts to practice your skills with virtual money, navigate the trading platform, and test your strategy. When you're ready, you can easily open a live trading account and start trading with real money.

  • User-friendly Trading Platform
    Trading platforms can vary in quality from one broker to another, and some platforms can be way more complex than others. If you're new to online trading, it's highly recommended to choose brokers that offer trading platforms with simple designs. It will definitely save time and help you navigate the platform better.

  • Plenty of Learning Resources
    One of the most important steps for beginners is to learn about the basics of trading. Many successful traders taught themselves by reading a bunch of strategies and applying them in their trades. Therefore, it would be helpful to prioritize brokers that offer free educational materials in various formats, like articles, webinars, and others.

 

Start to Grow a Small Account in OctaFX

OctaFX is a popular regulated broker that offers many interesting trading features with relatively low costs, making it suitable to grow small accounts for beginners. The broker offers MetaQuotes software, including MetaTrader 4 and MetaTrader 5 – both are well-known to be the top trading platform in the industry. The platforms are available via desktop as well as mobile. In addition, the broker has a web interface for copy trading that connects to its MetaTrader 4 platform.

Here's how to open a trading account at OctaFX:

  1. Visit OctaFX's official website and click "Open an Account" on the homepage.
  2. Fill in the registration form. Input your personal information and your password. For simpler steps, you can also use your Google or Facebook account to log in.
  3. Verify your email address.
  4. Choose your preferred trading platform and account type.
  5. Make your first deposit and verify your identity for withdrawal.

For more details and reviews on OctaFX, you can refer to the following table:

| Specifications | Review

OctaFX is an international Forex broker that operates worldwide. The domain belongs to a group of companies called Octa Markets Incorporated which is registered with St. Vincent and Grenadines FSA. Currently, the company focuses on Asian, South African, and Australian markets. OctaFX.com does not accept European clients as this market is specifically appointed to OctaFX.eu (regulated by CySEC).