3 reasons why I even bother trading a small account

If you look closely at my trade log, you will see that the amount that I trade is small. I am not going to get rich anytime soon even if I can maintain my 10% return or so every half a year. My wife was asking me the other day why I don't plunk in more money to my trading accounts since I have even won a trading contest and all. With accounts and trading sizes so small, I am appearing to be just wasting my time. For example, it took 2 to 3 hours of research and analysis the night before this recent trade in gold and then just to see it make \$35. At least it's slightly better than the minimum wage here. The real trial though, is in facing a losing streak. Imagine spending hours and hours pouring over price charts, economic news, and financial data only to see your account shrink and shrink. Those are the times when you wonder why you even bother putting in the hours. It just won't make a difference, right? Well, here are my three motivations for trading a small account.

  1. Slow and steady. The fact is, trading is about aiming for consistency and not scoring that one-in-a-lifetime trade that'll make you rich. That took me a few years to realize. It is a lot easier to make pocket change than score a jackpot. Don't make trading harder on yourself.
  2. Trading comfortably. Hey, this is a hobby. I wouldn't last too long in this game if I'm sweating my palms with every position. If I bet my farm often, either my account will go broke or my sanity will. I prefer to keep my risk small enough to lasts and make trading enjoyable. If I want thrills, I go to a casino (there is actually a big casino 15 min. from my house).
  3. Walk before you run. Eventually though, as I become consistently profitable, I increase my risk ever so slightly step by step. Couple that with the effect of compounding, I may eventually be able to replace my salary with my trading income. That is probably still years away for me, but as people say, everybody has to start somewhere.

So no, I don't think trading a small size is a waste of my time. It is a good risk management, psychological mediation, and learning technique for amateur traders such as myself.