Welcome back. I hope you are keeping safe and still holding up well under lock down circumstances. Please continue to look after yourself and your families. Wash & sanitise those hands, wear that uncomfortable mask and keep the social distancing rules, we will soon be fine. OK, today I want to share something regarding trading capital.

I always say that a person who can take care of his/her account by protecting its equity no matter how small the account is, can definitely do the same with a bigger account. I have seen this with my mentees when I coach them on smaller accounts, they develop a lot of patience which is a much needed skill in trading. A smaller account can teach you how to be more patient. It is the same patience that will carry you when you start trading a bigger account. If you start with a bigger capital before working on getting skills such as patience and being more disciplined, you are more likely to mess up and loose all the money. My favourite saying is “get a skill and get it right” then work on your capital when you’ve worked well on yourself and you’ve got it right. I’ve also published a blog post on how to grow a smaller account.

Undercapitalised myth or underdeveloped mindset?

It’s definitely a mindset issue. It might be true that with a bigger account, you can achieve more. The truth is, not everyone with a bigger account succeeds. I have seen people failing with enough trading capital and people getting it right with a smaller trading capital. What separates the two is the fact that the one with a bigger capital is likely to rely on the money and neglect all the principles and things like patience. A person who trades a bigger account as a beginner is also likely to think that the account is immune to margin call because the capital is bigger (which is definitely not true) succeeding with a bigger account requires more discipline.

If you feel like you are not yet disciplined and you are still struggling to overcome that (I’ll assume that a person who is aware of this, would want to work on it) rather start small even if you have enough money to start big, start small while you train yourself on such issues (I love coaching my mentees on such issues, having a mentor/coach to help you, makes it easier to overcome). I am sure you have heard the “if I had a bigger account I would have made it ’‘ excuse (I hear this all the time, even from my mentees) I am saying it’s an excuse because I know that succeeding in Forex trading requires a lot more than just capital.

A Perfect Example

A person who has a job would say only if they can get a promotion and earn a bit more, financial life will improve as well, but the opposite usually happens if that person has discipline issues. They start to increase spending and always running short of money, this particular person needs more discipline than more money. They aren’t undercapitalised but underdeveloped. It is the mindset and the discipline that is needed, not more money.

Now back to Forex trading, when a beginner trader wins, they feel brilliant and invincible, then start to take wild risks and trade larger volumes than what the account can handle. This type of behaviour leads to losing money. The capital is not an issue here but the behaviour is . I have come to understand that if you can handle $1000 trading account, you can also handle a $5000 account using the same mentality and discipline. You can also destroy a $5000 account as quickly as you would do with a $1000 or even $500, It is all in the mentality. If you can manage yourself, you can manage your finances.

Thank you for stopping by and reading this post. Thank you for your continuous support by sharing my content with more people who may need to improve their trading lives. For private lessons, mentorship & coaching, you can check detailed information HERE and WhatsApp me for instant chat (see WhatsApp feature at the far bottom right of this post).