Tips For Growing A Small Capital To Six Figures
Author:
Joel Abiola Olatinwo
The primary goal of this blog is to help prospective and interested traders with limited capital grow their trading account. So, in this note, I will present some tips on what a small capital traders can do to grow a shoestring budget to 6 digits.
What does it take to grow a small capital to 6 digits?
Your preferred financial instrument notwithstanding, you need the following to succeed in the trading world:
There are four important factors necessary for capital growth: Pick The Right Market, Sound Technical Approach, Trading Goal, and A Trading Partner/Group!
Pick the Right Market:
The choice of financial market for capital growth is a major factor that can make or mar a trader's trading adventure. As a small capital trader, you need patience and knowledge of the chosen financial instrument to survive in the trading world. While there are several financial instruments to choose from for capital growth, the available capital, financial goal and knowledge are the most important factors necessary to achieve your desire. How much fund do you have? What percentage of it are you willing to risk? How would losing the capital affect your overall well being? These are important questions the trader must settle before venturing into the financial markets.
Almost all the trading instruments allow prospective traders with limited fund to try their trading acumen, but none offers a risk free ride to success. In my opinion, I often advise all prospective traders with capital growth in mind to look into Stock Options. The reasons are not far fetched: Stock Options, put simply, affords the trader the right but not an obligation to buy or sell the underlying security at a predetermined price within a specified time frame, and at a fraction of the Index/Stock price. Apart from the gargantuan returns possible in options trading, the financial instrument is attractive because the risk involved is predetermined and significantly small compared to other trading instruments with margin requirement.
Trading Goal:
Setting a trading goal before taking on the market is very important. Without a specific goal, the trader's approach would be aimless. What do you intend to achieve? How much do you want to make; and what time frame do you intend to make it? These are important questions the trader must answer before taking a plunge. They are the guide posts for the trader in his/her trading adventure. And whether the trader is successful or not will be determined by how she/he strictly adheres to the set goals. If the trading objective is to make 'x' amount of money within a specific time frame, the trader then has a framework for the adventure.
Another important reason for setting a goal is to be free from frustration. There are times when generating trading opportunities may require patience, especially if the market is locked in a consolidation phase or range bound (sideways). There are three phases you will encounter in any trading instrument: Accumulation, Trend Following, and Consolidation. So, exercising patience during the static movement can be painstaking but if you keep your eyes on the set goal, you will ease your mind of the pressure to trade by all means. Patience is the only true test of knowledge in trading.
Sound Technical Approach To The Market:
If your capital base is between $1,000.00 and $1M, you must have a technical approach to the market before you can succeed. Technical approach in this context is not limited to technical indicators, but an approach clearly defined before the trade is executed. It is a well laid out plan for trades which may include Order Execution, Entry, Trade Management and Exit. An example of a technical approach is when a trader buys shares of Company XYZ ahead of its earnings. The trader must have an edge before taking a position. What is your edge? In my trading approach there are two technical factors that I monitor closely before buying or selling a security.
Another hint on technical approach is to find a price set-up that makes money, master it, and trade it consistently. Perhaps you have heard it said "The trend is your friend" How true that statement is! But here is my modification of the statement, "The Trend You Know Is Your Friend" Yes! Your friend is the trend you know, the one you have mastered!! Not just any trend! In my over twenty one years of trading experience, I have found two different price set-ups for both bullish and bearish moves; sure price set-up that generate profits at least 80% of the time. It is futile trying to pick tops or bottoms, rather I wait patiently for price to set up my way. My method works in any market, but I prefer trading Equity Options because there are several stocks to choose from. If you're not a fundamental trader, the only way to analyze the market and make money is by TECHNICAL ANALYSIS. And it does not matter if you trade Forex, Options, Stocks, Futures, etc, you cannot do away with Technical Analysis as a small capital trader.
A Trading Partner/Group:
The trading acumen, skill, or talent of a trader notwithstanding, without a group of traders lending him/her support, his/her success will be limited. A trader with a good trading system would make much more with a group of traders than if s/he were to trade alone. Let me cull from personal experience: Back in the early 2000, I had about 400 traders who learned my technical approach to trading. We all worked together and the results were amazing. It was a moment of shared financial prosperity during the period we all traded. So having at least a trading partner is another factor that can help your trading experience.
If you need help growing your capital base, you can reach me through the following
Your preferred financial instrument notwithstanding, you need the following to succeed in the trading world:
There are four important factors necessary for capital growth: Pick The Right Market, Sound Technical Approach, Trading Goal, and A Trading Partner/Group!
Pick the Right Market:
The choice of financial market for capital growth is a major factor that can make or mar a trader's trading adventure. As a small capital trader, you need patience and knowledge of the chosen financial instrument to survive in the trading world. While there are several financial instruments to choose from for capital growth, the available capital, financial goal and knowledge are the most important factors necessary to achieve your desire. How much fund do you have? What percentage of it are you willing to risk? How would losing the capital affect your overall well being? These are important questions the trader must settle before venturing into the financial markets.
Almost all the trading instruments allow prospective traders with limited fund to try their trading acumen, but none offers a risk free ride to success. In my opinion, I often advise all prospective traders with capital growth in mind to look into Stock Options. The reasons are not far fetched: Stock Options, put simply, affords the trader the right but not an obligation to buy or sell the underlying security at a predetermined price within a specified time frame, and at a fraction of the Index/Stock price. Apart from the gargantuan returns possible in options trading, the financial instrument is attractive because the risk involved is predetermined and significantly small compared to other trading instruments with margin requirement.
Trading Goal:
Setting a trading goal before taking on the market is very important. Without a specific goal, the trader's approach would be aimless. What do you intend to achieve? How much do you want to make; and what time frame do you intend to make it? These are important questions the trader must answer before taking a plunge. They are the guide posts for the trader in his/her trading adventure. And whether the trader is successful or not will be determined by how she/he strictly adheres to the set goals. If the trading objective is to make 'x' amount of money within a specific time frame, the trader then has a framework for the adventure.
Another important reason for setting a goal is to be free from frustration. There are times when generating trading opportunities may require patience, especially if the market is locked in a consolidation phase or range bound (sideways). There are three phases you will encounter in any trading instrument: Accumulation, Trend Following, and Consolidation. So, exercising patience during the static movement can be painstaking but if you keep your eyes on the set goal, you will ease your mind of the pressure to trade by all means. Patience is the only true test of knowledge in trading.
Sound Technical Approach To The Market:
If your capital base is between $1,000.00 and $1M, you must have a technical approach to the market before you can succeed. Technical approach in this context is not limited to technical indicators, but an approach clearly defined before the trade is executed. It is a well laid out plan for trades which may include Order Execution, Entry, Trade Management and Exit. An example of a technical approach is when a trader buys shares of Company XYZ ahead of its earnings. The trader must have an edge before taking a position. What is your edge? In my trading approach there are two technical factors that I monitor closely before buying or selling a security.
Another hint on technical approach is to find a price set-up that makes money, master it, and trade it consistently. Perhaps you have heard it said "The trend is your friend" How true that statement is! But here is my modification of the statement, "The Trend You Know Is Your Friend" Yes! Your friend is the trend you know, the one you have mastered!! Not just any trend! In my over twenty one years of trading experience, I have found two different price set-ups for both bullish and bearish moves; sure price set-up that generate profits at least 80% of the time. It is futile trying to pick tops or bottoms, rather I wait patiently for price to set up my way. My method works in any market, but I prefer trading Equity Options because there are several stocks to choose from. If you're not a fundamental trader, the only way to analyze the market and make money is by TECHNICAL ANALYSIS. And it does not matter if you trade Forex, Options, Stocks, Futures, etc, you cannot do away with Technical Analysis as a small capital trader.
A Trading Partner/Group:
The trading acumen, skill, or talent of a trader notwithstanding, without a group of traders lending him/her support, his/her success will be limited. A trader with a good trading system would make much more with a group of traders than if s/he were to trade alone. Let me cull from personal experience: Back in the early 2000, I had about 400 traders who learned my technical approach to trading. We all worked together and the results were amazing. It was a moment of shared financial prosperity during the period we all traded. So having at least a trading partner is another factor that can help your trading experience.
If you need help growing your capital base, you can reach me through the following
E-Mail Address: coach.expert2020 [@] gmail.com
Thanks
Joel Abiola Olatinwo
