Can I trade with 100 dollars? How can I grow and strengthen my account with 100 dollars?

Many new friends are willing to use a small amount of $100 to participate in the market when they first start trading. At the beginning, they might choose to participate in the market with $100, $200, or $500. They have even thought about how to turn $100 into $1000, and they have also considered how to make $100 grow to $1000.

So, is this line of thinking feasible? Can we really grow a small account of 100 dollars or so into something bigger and stronger? Let's take 100 dollars or 200 dollars as an example.

So if your account balance is actually $200, and you set a stop loss of 1% or 2% for a single trade, with a 1% loss or 2%, many trading pairs you won't be able to participate in. Taking $BTC as an example, if you set the position with a stop loss of 1% or 2%, it's almost impossible. Looking at the current volatility of $BTC, 1% is $2. Based on this $200 account, 1% is $2, and 2% is $4. If you set the position with such a method based on losses, it would be very difficult to set that position, right? Therefore, you might not be able to trade $BTC. Many people trading with small accounts, especially those with $200 or $300, when they do this, they often do not fully comply with the requirements of capital management and risk control. Their single trade stop loss may be 10%, or even 20%, participating in trades with such risks.

I believe many friends, during the trading process, especially when you are currently using a small account, your risk management for this fund is probably like this: a stop loss of 100 dollars per transaction might be set at 10 dollars or 20 dollars, right? So I can say without hesitation that losing all your principal is just a matter of time. This is completely a case of bleeding out with a dull knife.

Why do I say this? When you participate in this market with an account size of 100 dollars or 200-300 dollars, there are two possibilities. The first possibility is that you are not confident enough in your trading. You may not be familiar enough with your current trading system, or you may not even have a trading system at all, which is why you are willing to participate in this market with a small amount of capital. You want to train and feel that you are participating in the market with a small amount of capital, but in reality, losing your principal is just a matter of time.

When you lose all your money, you put in another one or two hundred dollars, and then you keep losing in this market. After losing, you put in another one or two hundred, right? And then you keep losing, thus creating a vicious cycle. In this market, you are in a state of being cut with a dull knife, constantly losing money. On the other hand, there are friends who are relatively confident in their own trading system and have a mature trading system. However, they currently lack capital, so they choose to use a smaller account size to participate in the market. Is this feasible?

Then we can calculate an account, that is, for example, if you are currently trading, your win rate can be maintained at a 60%, maintained at about 60%. Then, your P&L ratio can reach a 1.5 to 1.5 or 1 to 2. If you have such a profit and loss ratio, then if you are in this market, if you strictly abide by this fund management and risk control requirements, then you will participate in the market according to 2% of your single use of principal. Then 200 hundred dollars, 2% is 4 dollars. Then let's calculate that a month is 20 trading days. Let's take a look at how if you make two trades a day, you can get $8 with a 1-to-2 profit and loss ratio of one trade. Here, those two deals are $16. If you say 20 trading days, let's multiply it by 20, that's $320. This is still a profit target that you can achieve in a situation where you win all.

If your win rate is 60%, then multiplying by 0.6 means that the profit figure actually doesn't even cover your living expenses; it's simply not enough. So, if you have an account with one or two hundred dollars and you say you want to reach 1000, or even 10,000 dollars, that difficulty is actually very, very high, unless you are gambling, betting on the market. You see a position, and then you go in heavily, increasing your position on unrealized gains. In that case, you might be able to grow your small account significantly in a short period of time. However, if in a certain trade you really turn 100 dollars or 200 dollars into 1000, that may not actually be a good thing for you; it could still be a bad thing.

Why do I say this? Because once you have had such an experience, you will have one, two, three, and you may do many transactions like this afterwards. After reaching 1000, you might still go in heavily and aim for 10000. In this process, a mistake you make at some point could lead to a significant drawdown of your funds, or even result in liquidation.

I believe many people encounter such a problem when trading with small accounts. Some friends might argue that they can trade at this small level, making 1-20 trades or even 30-40 trades a day. But I want to tell you that human energy is limited. Just because you sit in front of the computer and trade continuously doesn't mean you can make money. Each time you open and close a position is a drain on your energy. So, is there anyone who can open and close positions dozens of times in a day and still be profitable? Yes, there are definitely such people, but those people are not you.

You can go back and take a look at your own delivery order, I believe that in your delivery order history, there must have been such frequent transactions, especially in the short-term back and forth trading situation. You can see if you trade like this, and whether you will make a profit or a loss in the long run. After you read it, I'm sure you already have the answer in your heart. With this kind of high-frequency trading constantly, it is easy for you to get caught up in an emotional situation. When you overcome your sanity emotionally, then in fact, you are slowly doing it in this market and it becomes a form of gambling. Then you think you're doing this short-term, then you're actually doing it and it's gambling. Actually, I think if your starting capital is only $100 or a few hundred dollars, and then you participate in the game in this market, then I think you have to give up the illusion.

What I mean is that I want to reach 1000, 2000, or even 10,000, 20,000 by starting with 100 or 200. I think it's better not to have such thoughts. Instead of continuously engaging in this vicious cycle, you might as well choose to operate with a simulated account. When you can achieve stable profits in the simulated account and develop your own trading system, then accumulate your original principal, like from staking, etc., this is all much more practical than continuously going through this vicious cycle with 100 dollars, 200 dollars, or 300 dollars.

Using hundreds of dollars now to continuously inject money into this market is meaningless and without value. A simulated account can still help you train your own trading system in this market; this money is insignificant to you. If you fail, you can reset. If you cannot achieve stable profits even after this, then you should consider whether to give up trading.

Because your risk tolerance with 100 dollars or 200 dollars is very low, compared to an account of 10,000 dollars, its risk tolerance is much stronger. Moreover, if you can strictly adhere to the rules of your trading system and trade according to this risk control standard, then you might be able to continuously compound your account and achieve a turnover. Therefore, if you are currently still using 100 dollars or 200 dollars and constantly engaging in a vicious cycle in this market, it might be better to consider trading with a simulated account to ultimately develop your own trading system and achieve stable profits.

What Xiao Zhi wants to say in the end is that a successful trader can never achieve tenfold or hundredfold returns in just one day or even one month. It is only through continuous compounding, compounding, and more compounding that one can make a leap from small capital to large capital.
#Gate 品牌战略重磅升级#
#交易心得 #