Trading with a small account to make a big return is a tricky task. Many people in Hong Kong tried to use the leverage to turn their small account into a big one but hey have failed miserably. To make trades in a small account and utilize the leverage, requires strong analytical skill. You might be an experienced trader but you may not have the courage to deal with such stress. Taking trades with high risk and managed the big profit is more about precision. If you make a slight mistake, you are going to pay heavily. However, there are certain rules that allow retail traders to make some serious profit from this market. Let’s dig into the details.
Use the leverage wisely
The first thing you need to learn about is the use of leverage. Without using the leverage in a wise manner, you are bound to lose trades most of the time. Rookies don’t know how to place a trade with high risk. They simply risk more than 3% of the account balance with the hope that everything will go fine. They might be able to pull the trigger for some of the trades but in the long run, they will blow up the trading account. Things need to do in a very precise way. Use the demo account to learn about trading in a high leverage environment. Once you become comfortable, you can test different kinds of trading techniques.
Trade with the best broker
In order to trade in such extreme conditions, you should trade with a broker like Saxo. Feel free to learn more about Saxo by visiting their website. They will give you access to a premium demo account and you can learn all the about trading without risking too much. Things are not that difficult as it seems. But if you take trades with managed risk and use the advanced tools, you can make some serious profit from this market. Never take too much risk while trying to make a big profit. Even after having the best tools, you have to know your limit.
Trade with a safety net
You must trade with a safety net while dealing with the small capital. Having a big capital is an added advantage since you can afford to lose some more trades. But with a small capital, you can’t afford to make a silly mistake. Though you will have to lose some of the trades with the help of proper risk to reward ratio, you can able to recover the loss. Unless you are having a 1:4+ risk to reward ratio in the trade setup, you should not try to place any trades. The maximum risk you can take per trade is 3%. In some rare cases, you are allowed to risk more than 3% of the account balance, but you must be willing to take the loss.
Use a tight stop
You must learn to use a tight stop in order to maximize the profit potential in trading. The majority of the retail traders don’t know how to manage the tight stop in each trade. They lose most of the trades and blame the market. To use a tight stop you have to learn about the price action trading method. The price action trading strategy will allow you to execute high-quality trades and will help you to make some serious profit in the most complicated market. You don’t have to push things to the next limit in the learning stage. Just use the basic pattern and you will be safe.
In order to make some serious profit with a small account, you must have precise knowledge of risk management. If not, you are going to have a tough time in trading. Learn about risk exposure and work hard to improve your precision.