To Grow Your Trading Account, you need a lot of discipline and the right mindset. Growing your trading account seems quite an interesting task but in reality, it is quite challenging. It’s not at all easy to get consistent returns from your trading every month although it looks simple to people. Especially, when you are continuously losing money and not getting the best way to trade, it looks nearly impossible for you to grow your trading account. After drawdowns, traders find various ways to grow their accounts, but they fail to find the exact process of growing their accounts.
In today’s lesson, I am going to tell you the exact process of growing a trading account. If you follow this process over a period I am sure, you will definitely grow your account.
This is the most simple yet most effective point when it comes to growing your trading account. For a practical example, let’s take a look at reality, when you do an FD at the bank, how much returns do you expect from them, nearly 5-8% per annum? Even if you invest in mutual funds or in stock, on average you get around 20 to 25 % of returns on your capital. So, how can you expect 100% 200% returns on your capital in one year through trading?
The main reason due to which people enter into the trading business is they want to make some quick money. Most people want to double their capital at the beginning of their trading career, which is not easy for everyone or almost impossible for new traders.
What I have observed in my trading career is that people with small accounts always want to double their capital and on the other side, the people with bigger capital, patiently wait for the right opportunity. Experienced traders always have realistic expectations with the returns and that is the important reason behind their continuous and sustainable growth in the market.
When new traders trade with a particular strategy and they get profit in 2 or 3 trades they think that this is the most effective strategy in the world and when they make a loss in the next trade they think this strategy is not working for me, let me try another strategy and cycle repeats.
Instead of trying a lot of strategies, you should always trade with one strategy and try to master it. It will take time, no doubt about it but once you master one strategy then you have that edge in your trading.
One more important thing that I want to clear here is understanding the risk you are taking. Even if you have mastered one trading strategy you can’t put all your money in one trade and hope for profit. Risk Management is very much important at every point. Many traders commit this mistake and end up losing all the money they have.
Traders who focus more on money, profit, and rewards actually find it very difficult to trade and those who focus on learning how to trade will eventually make more money than normal traders.
This phenomenon happens because when you trade with the expectations of profit then you will have the additional pressure of making money and when you trade with the intent of learning then you don’t pressurize yourself for making money.
This is a very common problem for all amateur traders. They always want to capture all the moves in the market. Many times traders fail to keep big profits in the hope of capturing the entire move.
Many traders once they get their targeted profits, hope for more profit and they let their profits run even after the targets but the reality of the market is different.
Markets always tend to rotate, the market will not continuously move in one direction, I would rather take the RR of 1:2, 1:2.5, or 1:3 and cut my position rather than hoping and holding the trade with the intention of capturing the entire move.
Obviously, there will be some times where you should keep your profits running such as in bear markets or in bull markets where markets offer you great risk to reward ratios but in most of the cases, you should think practical and get out of the trade at the right time.
Now, the question comes when we should keep my profits running and when I should exit my trade after hitting a target? That kind of judgment is achieved by your experience. There is no specific answer to this question.
As you get more exposure to the markets and as you spend more time in front of your trading screen, you will eventually get the answers to all such questions.
So, these are the Top 3 Ideas or Rules using which anyone, even a beginner can grow his trading account but you have to follow all these rules every single time you trade. I hope that through this article, you get the exact process of growing your trading account. Let me know your views about these rules, you can comment in the comment section. Happy Learning!
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