The Small-Account Challenge Begins!

by | Dec 9, 2021

Key Takeaways

  • Why I’m going back to a small account…
  • My secret method for potentially growing a small account into a massive cash pile…  
  • Plus — 3 easy ways to make sure you’re trading with discipline… 

I recently decided it was time to take on a personal challenge — trading a small account with only $1,000.

Today, I want to share what led me to take on this experiment of growing a small account, and how I plan to do it. 

My goal with this challenge is to show you what’s possible with years of commitment to studying. So keep reading as I break down my thought process for trading a small account…

Why I’m Trading a $1,000 Account

Before I go on, I should note that my trading results are in no way typical. I’ve been trading for years. That means I have the benefit of experience, dedication, and knowledge on my side. Always remember that most traders lose. 

Now that we have that out of the way, let’s break down what inspired me to go back to trading a small account. 

The bottom line is this: Like my mentor Tim Sykes, I live to teach. 

These days, I honestly get more pleasure out of seeing students flourish than I do out of making huge money on a trade. (This might be hard to believe, but it’s the truth!)

When I pressed myself to consider what Evolvers would benefit most from, a small-account challenge seemed like the obvious choice.

After all, most of you aren’t trading 7-figure accounts like I am. I understand that growing an account to this size seems unreachable to some. 

With that in mind, let’s talk about how I plan on doing it…

How I’m Trading a $1,000 Account

We’ve gone over why I’m trading a small account, but what about how I’m trading it?

The keyword for me is discipline — you gotta have it, or else your small account is DOOMED.

But what exactly do I mean by this? And how do YOU trade a small account with discipline?

In my opinion, there are three key steps to take when trading a small account:

Step #1: Cut Losses (and Book Profits) Quickly!

You’ve heard me repeat Tim’s #1 rule many times before: always cut losses quickly. This remains as true as ever, and the same goes for booking profits quickly

If a trade’s going well, greed is your worst enemy. You must fight the urge to hold out for some glimmering, pie-in-the-sky price target. 

Pick a nearby realistic round number. When the share price gets close to this level, sell your contracts no matter what. 

I can’t overstate the importance of timing in options trading. When traders come to options from the world of common shares, the volatility can be jarring. 

So I’ll emphasize it again — If you’re up big on a short-dated options trade, one tiny move in the wrong direction could wipe out a huge chunk of your hard-earned profits. 

Bottom line: If you’re trading options with a small account … cut losses (and book profits) QUICKLY!

Step #2: Focus on Ideal Setups

Listen up, Evolvers. This is HUGE. Only focus on the best plays.

If I had to choose one key to small account trading, it would be narrowing down your setups.

Recently, it’s been as simple as targeting the single hottest momentum stock that week. These stocks tend to provide the best volume, volatility, and price action for small accounts to grow.

Do this — and this alone — and you’ll already be ahead of the small account curve.

My ideal setups usually contain the following:

  • Above-average volume
  • Exaggerated price action
  • A major catalyst

So do yourself a favor: Cut your watchlist down to the stocks that check these boxes, and focus on plays with your highest probability of success.

Step #3: Be Aggressive on Perfect Patterns

I’ve missed a few huge trades this year by second-guessing myself. In hindsight, the chart patterns were perfect.

I’ve learned from my mistakes. If the pattern’s perfect for me — it’s time to be aggressive.

This is especially important if you’re trading a small account. Take advantage of golden opportunities when they come to you. 

I don’t mean you should bet big on a speculative trade. Never risk more than you’re willing to lose.

I’m saying you should take the time to do your homework. Study hard and it will become easier to find disciplined conviction in your trading strategy.

Then, if the pattern you’ve been patiently waiting for suddenly appears — don’t hesitate. Strike while the iron’s hot.

Conclusion

I’d be lying if I said trading a small account is easy. This has been a humbling experience so far (and I’ve only just started)…

Then again, I have to admit that I have the advantage of lots of experience on my side. I’ve been trading for years. Don’t expect to experience the same results that I do.

But I promise you this: If you follow my advice for small account trading, you’ll help set yourself up for success. And in the crazy world of trading, that’s what you should strive toward.

Meet Mark:

Mark Croock is a former accountant who after studying under Millionaire Trader Tim Sykes turned his small account into $3.19 Million in trading profits by applying Tim’s strategies to options trading.

He started Evolved Trader to pay it forward and help other traders learn how to leverage options

 

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