Small Trading Account- The Truth about Growing a Small Account
Is it possible to flip a small trading account in a short period of time? Yes, It is theoretically possible. Is it likely? Not really. Unfortunately, flipping a small amount of money in a short period is risky and usually won't go your way. While still possible, this method of trading is more like gambling than trading.
Let's pretend you have a $1,000 account:
Let's pretend you have $1,000 in your account that you would like to turn into $2000 in a matter of a year. A yearly return of 100% is an extremely hard number to reach for any trader. In order to increase your account by 100% in a year you would need to risk a substantial amount of your capital. This is where things get tricky.
In most cases, one series of losses or one major loss can result in you blowing your $1000 account which is why we never recommend high risk trading like this. Of course, you may get lucky with some trades but it only takes one trade that doesn't go your way to completely erase your account.
So let's go back and say your goal is a return of 20% per year. This is a much more realistic goal and truthfully is a really great return in a year. If you were able to make this return on your $1000 account after a year your account will have reached $1200.
The Truth about Growing a Small Account
Unfortunately, it takes money to make money. This is especially true in forex. Making 20% on a $1,000 account is a lot different than making 20% on a $100,000 account. However, there are ways to grow your wealth in a safe way.
Most people don't like to hear the truth about growing a small account. The truth is growing a small account will take time. The only way to safely grow your money is by risking small amounts and compounding your money over time.
Speaking realistically, making 20% on a $1,000 account a year is not going to make a huge impact on your financial situation but that doesn't mean it won't in the future. Let's say in a few years you've managed to save and invest your money and now you have $10,000 in your account. In that time, you also learned the skills to trade and can now manage that money effectively. Using your learned skills and the money you've saved you can generate steady returns over time.
Psst! Don't know where to get started? Check out our free education page.
Forex gurus don't want you to know this:
We get a lot of backlash when we say that flipping an account in a short period of time is very unlikely. People like to argue that account flipping is easy because they know or follow someone who does it. Are they able to show you a third party track record to prove this? Chances are they will dance around this question but won't actually be able to prove anything.
The secret that most "gurus" won't tell you about forex trading is most retail traders don't make any money in forex trading. This is not to discourage you to trade. However, it is important to be realistic and understand that forex is not the secret to get rich quick. Being successful in trading will take patience and practice. Start on a demo account, save your money and only start trading with real money once you have found a strategy that works for you.
Flipping accounts in a short time period isn't trading, its gambling.
Start on a demo account, save your money and start trading with real money once you have found a strategy that works for you.
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There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.