A Simple Guide To Growing Your Trading Account

Growing your trading account into something respectable can seem like quite a daunting task if you’re new to trading or struggling just to keep your account above water. Too often, when you search for information on how to build your trading account you don’t find any type of methodical guide that you can follow nor practical information to assist you; it all seems to be vague and general information like “cut your losses and let your winners run”, etc. What you need is some practical and honest insight into what it takes to build a trading account from the ground up, because most traders simply have no clue how to do this since it’s so hard to find solid information on it.

In today’s lesson, I am going to lay out some guidelines that will help you build your trading account and that will remove a lot of the “mystery” of what it takes to start growing your trading account.

1. Stop trying so hard to turn your small account into a big one
The main attraction to trading for most people is the notion that they can make some fast money. The thought of taking one or two thousand dollars and turning into tens of thousands is extremely enticing to most people, and it’s this very type of thinking that sucks most people into the markets and also spits them back out.

Most retail traders with relatively small trading accounts have what I call “small account mentality”, and it’s this mentality that is the reason they struggle and continuously fail to make money in the market.

2. Focus on the “forest”, not the “trees”
To say that most traders put too much emphasis on any one trade is a big understatement. Most traders treat each trade as if it’s a lot more important than it really is…and if they’ve risked too much money on the trade it might actually be a lot more important than it should be. But, it’s important to understand the fact that your trading success is not determined by any one trade, but instead by a series of trades over time.

3. Understand risk reward and the importance of money management
Obviously, to build your trading account you need to understand how to manage your risk appropriately, but you might not be 100% clear on what that means.

As I just alluded to, many traders tend to focus most of their brain energy on profits and winning percentages when trading, and unfortunately for them these are all the least important topics in trading. In fact, I recently wrote an article on why winning percentages are irrelevant. What’s critical to a trader’s longevity and success in the market is focusing on controlling their risk per trade and overall money management.

4. Take profits: don’t worry about catching the whole move
Far too often, traders fail to secure solid profits because they are hoping for a bigger move, in other words they are being greedy. A simple reality of markets is that they tend to rotate a lot, meaning they don’t typically move in straight lines for very long before retracing. I would much rather take a solid 1:1.5 , 1:2, or 1:3 risk reward than let that profit go simply because I wanted more money.

Obviously, there are times when you can try to let your profits run, such as in very strong trends like we are seeing in the yen pairs right now. Gauging when to let a trade run and when to take the profit off the table is something you’ll improve through training and screen time, but it’s worth noting that the majority of the time you are going to be better served by aiming for a realistic profit of 2 or 3 times your risk.

5. Hold on tight to your profits!
profits Perhaps the most critical step to building your trading account is to not give back profits after a winning trade. It seems to be that humans are wired to want to jump right back into the market after a winning trade and “play around” with the money they’ve just made. Since making money on a winning trade “feels” easy after you’ve secured the money, your perception of risk in the market gets altered. I have even personally struggled with the feeling of wanting to jump back into the market after a good winning trade. However, it’s at this time, after a winning trade, that we are most vulnerable and exposed to the temptation of over-trading.

Building your trading account can seem like a difficult task if you are trying to “force” money out of the market. However, it doesn’t have to be this way; if you just relax and focus on learning to be a good trader, your account will start to grow “naturally”.


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