Hey hey, what's up my friend, so welcome back to today's episode, where we will be discussing write the Mystics that you want to avoid when trading a small account, I get it right. Most of us me included. I started off with a really small account and a mistake that many traders make is number one they ting in terms of the dollar amount. So, let's see, for example, you put in $ 100 into account $ 100, and maybe you make a trade and you're in $ 10 on the tree, and you only run into yourself so much time and effort energy to learn all the trading stuff out there and Make DeeDee RSI the chappathis the price section for just ten dollars on this pathetic tree man, I'm wasting my time, man, I rather work at McDonald's.

Now, here's the thing right. If you focus on a dollar amount and yes, it can be insignificant right. Ten dollars can't even get you a meal at a restaurant, but I don't want you to focus on a dollar amount, only to put things in perspective. Look at it in terms of your risk to reward.

Let's see for that trick, you risk five dollars on the train and you came back ten dollars. There's a risk to reward over one to two or, if you put it from a percentage perspective, that's a return of 10 % of your capital invested, that's pretty decent! Okay, but if you focus only on a dollar amount at $ 10, the pathetic $ 10 all right, then yes, you're gon na feel horrible about yourself. Remember your trading account size, isn't gon na be $ 100. All the way you're gon na scale up eventually when you become consistently profitable, when you're, confident from $ 100 to become to a 500 account $ 1,000, account 10,000.

100,000. Now, in this time run when you do a 10 % return, you can see how the dollar value changes significantly. So when you're trading, a small account, don't focus on a dollar value, it is gon na make you feel horrible right. So you've got to change your perspective.

I look at it. You know in terms of percentage. Look it in terms of your risk to reward mistake. Number two many traders, when it trade a small account.

They think that that is an N on Bo. I'm going to take this $ 200 trade in your car and after equal to six figures. I'm gon na turn into six figures. Then I can quit my job.

Go to the beach Seba spinacolada and retire. That's ridiculous! Try the odds of that happening right. It's pretty much! Even you know, slimmer than playing the lottery. It's very slim what's dead.

That could happen to you so mystic na Mathura. Is that you know you don't want to just have a small account and just trade it as it is. You want to instead add funds to your account regularly over time. So let me give you an example why this is so powerful.

So, let's see, for example, you have a thousand dollars of trading account. Okay, and let's say you do an average of 20 percent return each year. Just just follow with me on this: after 20 years right, a thousand dollars account will be worth about thirty, eight thousand dollars, three hundred and thirty seven dollars. Maybe we'll arrange man.

Your math is really good man Reena! Well, that's because I have another screen here that gives me the exact number so don't be doing pressure. I have another screen to to actually give me out the math number. That's really ready for me. So, anyway, a thousand dollars account compounded twenty percent a year after 20 years is wolf about thirty eight thousand dollars, three hundred thirty seven dollars.

Now? What if you were to this time around? Add some money to your trading account issue? Let's say this time around again: you treat with the $ 1,000 trading account, but each year you added an extra thousand dollars to your account. That's a more like that's, not a lot less about like eighty ninety dollars a month right, if you think about this. So a thousand dollars account - and you add extra one thousand dollars to your account each year and again right in same thing right. You compound it at 20 percent return a year and after 20 years guess how much this account will be worth well from the looks of things it's going to be worth two hundred and sixty two thousand dollars three hundred and sixty three dollars.

Can you see the difference one previously? It was about thirty eight thousand dollars, and now you have about two hundred sixty two thousand dollars all by just regularly adding funds to your account each year. That's the power of compounding and that's how you get out right of trading, a small account not by you know, trying to make that one two percent, you know and snowball over time. Yes, you can right, but if you really want to kind of see the big money, you've got to be willing to add funds over time to your calm. Okay.

Next one mistake: number three is that when traders treat a small account, they don't treat it seriously top process. Are they, after all, there's only a hundred dollars to come and there's only two hundred dollars. I can afford to lose there now. Here's the thing: if you have that mindset to start with, and eventually when you treat larger mom a thousand dollars, five thousand ten thousand guess what that mindset will be brought along to your larger size trading account that mindset will be the same and those habits, those Top process of yours right, then you head back then, when trading a small account and you bring it over to trading a large account, it's going to be a disaster.

So, yes, I know the account size is small, but you got ta, treat it seriously, because if you don't nail down the top process, correct me write all those bad habits. All those mindset will be brought over when you treat a large amount of money and this time around the damage will be even more painful and mistake number four. So this largely applies. I will see so much to people trading Forex, but more for people trading stocks.

So from where I'm from Singapore you'll be amazed right to know that the brokers down here right, they still charge an average of commission of about twenty to twenty-five dollars per trade. So, for example, I buy 100 shares of one of the local stock down here, say SingTel. I got ta pay like twenty to twenty-five dollars to buy commissions to the broker and if I sell, I got ta pay another twenty twenty-five dollars. I mean.

Let's give me the $ 25 says a loti: it's a benchmark price point. So can you see that if someone here so I don't hours and ollars account, you buy twenty-five dollars in commission, you sell another twenty-five dollars in commission. That's fifty dollars! That's about! That's about! Five percent return right. I mean that's about five percent down right of your from your trading account, so this is just from a Singaporean perspective.

If you're trading in the u.s. you've got Robin Hood, you've got all the other stuff like that. That will you know, have almost zero commission concert. So that's fine for you, but beware, right people from other parts of the world.

If you're trading stocks Commission is still a very real thing right, you've got ta. Take that into consideration, because again, if you have a thousand dollars, account you're paying $ 50 to Commission, it's gon na be very done difficult right to even break even on your account right and the more you train right, the faster your your trading account capital is Gon na get eroded so pay attention to the broker that you're choosing pay attention to the instruments that you're trading pay attention to the transaction cost right. That's incurring right as a percentage of your money debt, or rather as a percentage of the capital that you are trying to invest or trade with that's important and finally, mistake: number five: many traders da don't learn from their mistakes right, you're, not learning from your mistakes, Because, after all, it's a small economy and rainy, you know you know it's a small I can. I can afford to lose it.

I can afford to you know average into my losses I can afford to widen my stop-loss after I was only a small account. So, as I've said earlier right, if you have that mindset right, if you don't learn from your mistakes, you keep making mistakes when you're trading a small account, guess what, when you create a larger accounting future, the Mystics is, are still gon na, be there you're, not Gon na change all right, what makes you think that you're gon na change, just because you're trading a different account sighs? No, that mindset that top process, the bad habits is all gon na be carried over when you treat a larger accounting. This way these are so strong strikes right. This way, you know you're hurting hard-earned money right.

I just you know vaporize just like that those money could be better spent on your family, your house or whatsoever. So yeah don't treat this like a game. I know the money that you're treating might be small right, but whatever mistakes that you're making right now, whatever habits, bad habits, are you got ta break it right now, when you're trading, a small account, if you don't fix it right now, you'll never fix it at All so treat this as a business. Okay.

So a quick recap right to the mistakes that many traders make when they treat a small account number one. They focus on a dollar amount. Don't do that right! Focus on your percentage return instead, focus on your risk relative to returns. Number two: not adding funds regularly to your account number three: they don't treat it seriously number four: they choose the wrong broker to trade, the markets.

They are trading the wrong instruments for their given account size and number five. They don't learn from their mistakes and don't let this happen to you right. I know if you're watching this video right now or this podcast. You know that you're serious about trading in this is not gon na happen to you.

So with that said, I wish you good luck and good trading until next time you.