How To Stay Profitable with a Small Intraday Trading Account

How To Stay Profitable with a Small Intraday Trading Account

How To Stay Profitable with a Small Intraday Trading Account 1024 546 Steven Dux

The intro.

Is it possible to have a successful day trading career if you start with just $500?

Starting with a small account isn’t ideal (I recommend my students to begin with at least $3,000) BUT… it isn’t to say you can’t build a successful career with a small Intraday Trading account. In today’s article, I’ll show you how. While every trader would love to start with a big account, as that is what they believe leads to the greatest profits. But this isn’t entirely true. Other than account size, there are other factors that contribute to success. Capital for investing is, of course, important. And how much you have, and how you manage it, will establish your returns.

However, even with smaller capital, success is possible as it is all about what you do with your money. Other than account size, there are other factors that contribute to success. Capital for investing is, of course, important. And how much you have, and how you manage it, will establish your returns. However, even with smaller capital, success is possible as it is all about what you do with your money.

In today’s article, I’ll show you how to become profitable with even a small intraday trading account.

The reality is, very few traders start off with big trading accounts. Most start with small or medium-sized accounts.

Begin Trading

In the beginning, most traders invest only what they can afford or what they can afford to risk.

Getting into trading is daunting enough without you risking all your money… The process of finding resources, finding a good mentor, knowledge building, and perfecting your strategies is time-consuming because of all the overwhelming and conflicting information out there. Most people do not start with the confidence (or expertise) to put in large amounts of money in their account — or they simply cannot afford to! I get a lot of questions from beginners about how to trade if they only have a $500-1,000 account, could not apply for a margin account, and still want to make profits. Let me assure you, being profitable is achievable even with a small intraday trading account. In the last year, I’ve seen some of my students grow exponentially with small accounts. A lot of new traders have entered the market in 2020, and most of them have done so with small accounts.

The ones who follow my advice and the ones who put in the work have been able to shine.

One student, for example, who joined me this year in February with just $650 dollars in his account has managed to triple it every month. I normally advise my students to start with at least $3,000 of capital. I find that this is the amount that gives the necessary leverage at the beginning to gain traction. With this amount, you can set yourself up for success from the very beginning. But it is not that uncommon to find profits even with a smaller account. When you officially start trading, you must consider expenses like execution fees, borrow fees, overnight fees, etc. However, even after we consider these expenses, growth with just a $500 trading account is achievable.

Assuming you follow the guidance, practice proper risk management, stay focused and minimize your losses, you can expect to make a 50% growth in the first couple of months.

This means within just a couple of months, your account can grow to $750. Not a huge difference, but wait and see… This $750 now has the potential to make a 40-50% increment every month, so by month 6 on your trading journey your account could have grown to more than $3,000 in value. From this point on, you can expect exponential growth, provided you put in the work. Over the next 6-12 months, this $3,000 account could increase by five… six… maybe even as much as ten times. So even with just a small $500 trading account, you can potentially increase this to between $15-20k in around a year. That is more than a 20 fold growth. And yes… I have seen this happen year after year with my most committed students. You must be wondering how…

There are some criteria and conditions you can keep in mind while trading stocks to ensure profits even with a small account. Let’s take a look at what they are.

The criteria to

Monitor and Build Success

…from a small Intraday Trading account.

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In trading,

…a breakout is a potential opportunity that happens when a stock’s price moves above a resistance level.

When you have a small intraday trading account, leveraging such breakouts is key to your success (and building enough initial momentum to take your trading to exciting levels). So, in what type of conditions should you really buy the breakout? A good look at the float, market cap, and current news will give you a good idea of whether a stock is bullish or bearish on a current day.

1.

Float

Float refers to the shares a company has made available to the public.

These are the shares that traders can trade. The bigger the float, the more the supply. If the supply is high and demand is less, then the stock will not really move that much. The more the shares available the less in demand they are. Therefore it has fewer chances to increase in price. Trading is based on supply and demand so the float is extremely significant. Stock float is one of the first factors/criteria I look at when monitoring a stock.

2.

Market Caps

The next criteria you must look at is the market cap.

The bigger the market cap is, the harder it is for a stock to move. Market cap or capitalization is the total value in dollars of a company’s outstanding shares. We can find this out by multiplying the number of available shares by price per share. Figuring out how much a company is worth is significant in understanding if you must trade their stocks or not. Float and market cap will always be my priority to read before I even consider to read the trade on the chart.

3.

Price Condition

The more expensive the stock is, the harder it is for it to breakout.

That’s because not many people have that much money to buy really expensive stocks. Day traders tend to trade stocks that are relatively less expensive and are traded in high volume.

4.

Yearly Charts

Next, make sure you see a stock’s chart from the years gone by.

Long term charts, if you look closely, will tell you everything you need to know about a stock. It gives you a perspective about whether to invest or not in the stock. What type of resistance does it have? Is it consistently down-trending?

When a chart has been consistently down-trending for the last few years, the first greenday is extremely bullish once it gets a high amount of volume. Historical charts can be a good indicator of how a stock might behave right now. As such, it will help you make an informed decision.

5.

The Intraday Trading Chart

Intraday charts are an effective tool to figure out the stock movement.

Therefore it’s important to be able to read intraday charts. They give information about price, volume, and time intervals. So make sure this is one criteria you don’t miss out on while figuring out if you want to trade a stock or not. There are some traders who expect overnight miracles, whereas others appreciate how important it is to be patient and realistic.

Tips To Building

…a small Trading Account.

1.

Set realistic goals

Be the latter! Look at the bigger picture and get ready to put the hard work in.

Set up some goals for yourself that don’t involve overnight success. Accept that losses are also a part of the game. You won’t win all the time so accepting losses is important for a realistic mindset. It’ll keep you grounded and working hard. To make money in day trading, you have to be comfortable losing (to an extent) too. You’ll spend your initial time gaining the right knowledge instead of trading, because success in trading doesn’t happen overnight. It comes after a lot of work on your knowledge and skills.

It is a time-consuming exercise that will eventually bear fruit down the line. As I always say… day trading is not a get rich quick scheme. Accept that starting with a small account might not get you $1 million in the next few months, but your small account can still yield good profits in time (and sooner than you might think). While you’re being patient for results, spend time on my blog, YouTube channel and sign up for the Free Day Trading 101 Newsletter for information building. 

2.

Analyze your strengths and your weaknesses

A factor for growing profits in the future is to analyze your strengths and your weaknesses.

When you’re starting out, a good way to practice is to paper trade, because while paper trading, you’ll understand where you shine and where you don’t. Analyze these lessons periodically to figure out what you need to capitalize on and what you need to improve. Take a step back and critically look at how you’re doing during your paper trades. Or if you have already made some real trades with real money, analyze those performances too.

Perhaps you need to work on your impulsive decision making. Or perhaps your strength is patience. It’s important to figure out how you trade instinctively to get sustainable profits in the future. Only then will you improve. Even now, I analyze all my trades after I’ve made them. Whatever be the outcome. And that is how I’m able to sustain profits and increase them year after year.

3.

Practice Discipline

When your account is small, each decision you make counts. Take it as a legit profession and approach it with discipline.

No matter what the size of your account, you shouldn’t treat day trading as a hobby. Many beginners start to day trade as a pastime, dabble in it a few times with a small account, face losses, and give up too soon. When things don’t work out, they assume it’s impossible to make profits with a small account. Which is, of course, not true. What they needed were discipline and focus.

Keeping a check on your emotions, staying focused, and being patient is extremely significant for sustainable growth and profits. Look at the longer-term picture and work towards a plan. Having a plan will help you stay disciplined and not make rash decisions. It requires hard work but will yield huge rewards that can change your life!

4.

Choose the right mentor

Becoming a successful trader does not happen overnight and does not happen in a vacuum. You need a support system.

Trading can be a difficult, lonely profession if you don’t have the right people backing you. On the internet you’ll find hundreds of “experts” claiming to take you towards profits so how do you choose one? Take a look at this article that will guide you on how to go ahead choosing a mentor. This will be an extremely important and significant step that will determine if you’ll actually be successful. If you choose the right mentor, it doesn’t take long to get on the path to sustainable growth. One of my students, EA, became profitable within just 3 months after joining my program — and at present has become secure enough in his financial situation to plan a family.

This year alone he has made it to $430k!!!

Many beginners assume a successful trader will not teach you how to be successful yourself. This is not true. In fact, I truly found my calling when I started teaching. It’s a privilege to mentor newcomers, welcome them into the world of intraday trading.. I would be happy to do the same for you. No matter what the size of your account. So long as you have the right work ethic, you can learn what I teach. The Freedom Challenge and my mentorship are here to help you make day trading your primary source of income.

A small investment today of your time, effort, and dedication can lead to a transformed life in just a few months.

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