Why do people start with small accounts?

This is a discussion on Why do people start with small accounts? within the General Trading Chat forums, part of the Reception category; Originally Posted by Dr. Toad Obviously if you have a methodology with a demonstrated return greater than this you could ...

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Old Sep 9, 2017, 6:29pm   #9
 
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Originally Posted by Dr. Toad View Post
Obviously if you have a methodology with a demonstrated return greater than this you could adjust accordingly, but for someone starting out, expecting more than that is being pretty optimistic (and even 15-20% yearly is optimistic for someone new).
Making a profit at all is optimistic for someone new, but beginners are even more gullible now than they were in '99, and the costs of entry are even less, hence the general "what can go wrong?" mindset.
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Old Sep 9, 2017, 9:46pm   #10
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Damn I was going to quit my job once I doubled my 1k account
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Old Sep 9, 2017, 9:50pm   #11
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Damn I was going to quit my job once I doubled my 1k account
I keep telling you, if you buy low sell high, you can double account no problem. It won't work if you keep buy high sell low.
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Old Sep 9, 2017, 11:55pm   #12
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Cause they are bums .
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Old Sep 10, 2017, 11:59am   #13
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Originally Posted by seekingTruth16 View Post
You sometimes see threads with people trying to turn professional trader with as little as 10k or even 5k. I can't understand the thought process there....
Yes its foolish.. unless you still live rent free with parents in which case you'll be fine

If you make any money at all consistently you are in the 10% club (i think) so respect to anyone who can
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Old Sep 18, 2017, 5:14pm   #14
 
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Originally Posted by seekingTruth16 View Post
You sometimes see threads with people trying to turn professional trader with as little as 10k or even 5k. I can't understand the thought process there.

Let's say you start with 10k and compare trading for a living with getting a job.

If I work for a living, that's likely to cover my costs of living, and if I can set aside 100 per month, I'll end up gaining 1,200 over the year, or 12%. Better than a lot of hedge funds. If I can save 500 a month, my account is up 60%, better than almost all hedge funds! You are unlikely to make that return in trading in a year, and even if you could, after you have deducted living costs, what are the chances. Start with 5k, and we're talking 24% or 120%. Be realistic.

Working for a living, you're likely to increase your account more and gain pension money etc compared to trading. And the other thing to consider of course, is that if trading, your account can go down. Working doesn't usually lead to a loss.

Even for successful traders, it seems it only makes financial sense if your account is in the 6 figures*.




*of course some people can trade and work, and that makes sense if they can do it. I'm just referring to the idea of solely trading, no job.
You are 100% correct, there is no way you can make a living trading few thousand dollars, to me to do it full time and live off it you'll need at minimum 1mil, so you can live comfortably and save for a rainy day... Actually even if you trade on the side, to make money and compound, so you can get to that 1mil, you'll need to start with at least 5 - 6 digits account, no point of trading with less... One way around is to get funds from friends and family and run a small home office and get percentage of the profit, but just make sure you know what you are doing :-)
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Old Sep 18, 2017, 5:52pm   #15
 
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because they don't have enough $ for a bigger account i dunno?

or, maybe they want to lose less, eventually?
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Old Sep 25, 2017, 3:32pm   #16
 
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Yes some people do start with small account. There might be various reasons behind it that they are entering just to try and check what exactly trade is because it is not easy as it seems. Another reason can be that they cannot afford to lose more money or cannot invest more money than what they have invested.
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