Very Low Capital Trading

adrianallen99

Established member
630 4
Im writing a document on trading with very small capital. This is not meant to be a recommendation or condone trading with not much money. The aim is to provide some information on pitfalls and possible strategies for staying alive with sub £500 capital.

There are people, including me, who when faced with to trade or not to trade senario and little money, opt for trading. Its a make or break situation.

If anyone is interested in this or has any ideas (Don't tell me how stupid it is or call moan at me for even bringing the idea up), but perhaps give information on risks and your experience. I actually enjoy the challenge of turning next to nothing into a decent pot.

How did I get interested in this. Last year a friend gave me £75 and bet that I could not turn a decent profit by the end of the year investing in shares with a standard online broker. If I won I kept the money, if I lost I paid him £150. I had 6 months and could not top the account up. Fees were £12.50 a trade, so I was down first trade. After 3 months I have made over 600% gains and paid over £100 in commission.

This year I started with just £20 in a betfair account, I finally broke £3000 this week. A moment of madness early on cost me £500 and wiped out half my account, but has been pretty steady. Hardess part is excepting that £5 is a good daily gain on an account under £100.

Im not new to trading and the stock market, in fact I have been studying and playing the markets for over 15 years and setup an investment challenges at school in my business studies class back in the 80's. I managed to lose large amounts in an impressively small amount of time.
 

bracke

Experienced member
1,286 12
adrianallen99

I think that you idea is a good one.

I have no doubt that there are many who visit this site who have very limited cash available for trading but would like to do so.

Money management & self discipline is very important particularly when the available capital is small

You appear to have been very sucessful with your trading and I am sure that many of us would benefit from your knowledge and experience.

I look forward to your further posts

Regards

bracke
 

adrianallen99

Established member
630 4
Most people fail with small amount because they set their goals to high. Ive seen people make 1000% in a week, only to lose it all the next week.

Check bullpig.co.uk it is a forum/community for Betonmarkets.com. Look at the Combined P/L it is minus $274,119. Which is an average loss of about $600 per person. The highest weekly gain this week is Tiffany with 721% which is very impressive, but in the end always turns sour. With low amounts, staying alive is the name of the game, breaking even is a good result.
 

dc2000

Veteren member
4,741 127
Hi adrianallen99 I also think this is a good idea will it be in the form of a diary of your experiences or as a guide to a specific way of trading ie Forex, fixed odds, cfd's etc.

I also have a challenge which I am interested to take and will detail on the spreadbet thread
 

adrianallen99

Established member
630 4
Maybe part guide, part experiences. I learn quite a lot from having such small amounts (Okay, so you learn very little from trading with £20). My aim was not to make loads of money, it was more to make some money and fairly consistently. Along the way certain amounts seemed to pose problems (more phycological than anything else).
Getting past £100 was fairly easy as there was not much to lose, staying above was harder. Once I hit £200 it was relatively simple process getting up to £400-500.
My biggest hurdle was breaking £1000, I came withing £40 then decided to make one more trade that day to just push it over. I lost the trade and was back below £900, so I traded again and lost. Not to be outdone by the markets I waited for a really good opportunity and made the trade, it was going well, but it turned heavily against me and in an instant i was down £200. Good fortune seemed to be with me and it started to come back and I was just £100 down. In the next few minutes hope turn to sheer horror as I saw over half my account wipe out. I sold leaving just £360 in my account. I switched my computer off and walked away feeling sick.

It took me 2 weeks to recover financially and make back what I lost and finally break the £1000 barrier. Of course I could have have just put an extra £50 into my account to take me over that barrier in the first place :)
 

Buddhist

Junior member
31 0
I think this is a really good idea. I am not down to my last £50 but as my previous posting made clear I dont want too many mre bad weeks like this last one or I might well be. I think that being careful or being dead is a sound approach and one which I need to develop whatever amount of capital I have; it is a discipline I would benefit from. Lets hear about how you did it and what strategy you followed. I for one am very interested.

David

adrianallen99 said:
Maybe part guide, part experiences.
 

neil

Legendary member
5,167 746
spread your bets

adrianallen99 said:
Most people fail with small amount because they set their goals to high. Ive seen people make 1000% in a week, only to lose it all the next week.

Check bullpig.co.uk it is a forum/community for Betonmarkets.com. Look at the Combined P/L it is minus $274,119. Which is an average loss of about $600 per person. The highest weekly gain this week is Tiffany with 721% which is very impressive, but in the end always turns sour. With low amounts, staying alive is the name of the game, breaking even is a good result.

Maybe you could interest a newspaper etc in your exploits and earn extra cash to feed your habit.
 

neil

Legendary member
5,167 746
Papers print trading diaries

adrianallen99 said:
Maybe they will be interested if I make a million :)
Some guy in the Times once ran a diary of his trades. He would only buy I believe, he was not a trader as such. You could approach them and offer a diary of a spread better or direct access trade or whatever.

Good luck.
 

dagsyk

Newbie
7 0
It's a great idea!
I'm new to trading and currently reading Elder's Come into my trading Room. I felt really inadequate when I read " Do not even think about beginning to trade with less than $20000" !!
 

JonnyT

Senior member
2,560 22
Elder is right, you need a good amount of capital before you can even consider trading for a living.

JonnyT
 

chump

Senior member
2,212 274
I have not read Elder so I don't know the context of his statement.However, I would have thought the crux is not whether you can trade with less than $20,000,but rather what are the criteria underpinning your trading. Are you doing it to meets current living costs, to gain experience for future trading, or what ?
Certainly if I was starting out to trade ,but did not need proceeds or capital for liquidity then that is totally different as a situation to that where you have no other means of support and in those circumstances you can commence trading with a lot less than $20,000.

Context is important..

Cheers
 

kevin546

Established member
699 0
Adrian

I would think when you trade with a small amount of capital discipline as always must be high on the agenda. A trading plan that follows low risk and you do know what you want from your deal. One of the things that helped me on my way was to accept small wins and small total gains for a session. When you view the market in terms of a playing field where you can take something from it each time you visit then your capital growth can expand. When you set unrealistic goals that is when positive deals turn sour.

Where you only have small capital then keeping it safe so that you are still in the game next year you need to have a proper trading plan and during the early stages of your trading you risk a very small % of your capital. That way if things dont quite work out you do not lose to much to quickly before the novice becomes more experienced. I am a day trader of the FTSE and tend to trade the morning only I look to obtain 20 points but do not care if it is less or more. Another point I am happy to take a loss provided it meets my stop policy, in other words if I walk away with a loss provided I stopped when I should have and not let the deal move further against me than I planned for this is not considered a loss but the risk I originally accepted when taking the deal. Stopping a deal is very important as it safeguards your capital.
But I am sure you already know this I have mentioned it for novices its simple really let winner run and cut your losses short.

Kevin
 

andrewmooton

Active member
192 1
I only have £600 starting capital for SBing but I could stretch to £1000.

I'm not looking to make a living at this stage but I did believe that it would be possible to compound my profits untill I had enough in the pot to live off.

Does anyone know if it would be realistic to do this, providing i have a good trading system and discipline?

Andrew
 

andrewmooton

Active member
192 1
Kevin, I know how to cut losses short but I have no idea how your are supposed to let winners run.

Could you explain how to let winners run?

Cheers.
 
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