Profit From Your Mistakes
The final tip that I want to share with you is that when you're trading a small account as a beginner, you want to learn and profit from your mistakes.
Because when you're trading a small account, that's when the mistakes are not so costly.
Blowing up a $500 account with mistakes is better than blowing up a $500,000 account.
As you start with a small capital, expect to make all the mistakes a trader goes through.
You couldn't be as bad as you are when you get started in trading as long as you profit from mistakes.
Eventually, those will be the same mistakes that you can avoid by the time you will be trading a large account.
So let me ask you 3 questions:
1. What is your mistake?
The mistake could be clicking buy instead of clicking sell.
You basically, messed up your order as you didn’t know that you clicked on buy instead of sell.
Another mistake is that instead of risking 1% on the trade, you risked 10%
2. Why do you make it?
Maybe it's because you're new to the platform, your cat went into your computer, you were in a rush, etc.
Also, you may have risked 10% because you’re manually calculating the size of your position and there’s an error in your calculation.
3. How will you prevent it?
Quite simply, if you want to prevent yourself from making such silly mistakes, open up a demo account, lock yourself in a room where your cat won’t get in, and take your time making trading decisions.
One way to also avoid making errors in position sizing is to use a position sizing calculator.
That's how you can actually learn and profit from your mistakes!
With that said, let's do a quick summary…