And So it begins
The idea for this challenge is nothing new I am sure, however I have had several students ask me if it is possible to grow a small account.
The answer, ABSOLUTELY. The problem with this process is most people get stuck in how much money they are making or losing. Focusing on profit and loss on a small account is a sure fire way to lose money and hope. Saying something to yourself similar to... Well I only lost $15 on this trade. In all actuality may be upwards of 10% of the account, that would be like saying... I only lost $1,000 on a $10,000 account.
Those types of draw-downs destroy accounts and progress making it nearly impossible to become profitable.
I will be focusing on percent gains and not on the actual dollar value. Seeing a $5 or $10 dollar gain my not seem like much but at the start these will be significant gains in terms of percentages.
Once weekly Cash injections will occur every Wednesday, I will be transferring $25.00 per week, a realistic amount of cash for nearly anyone to achieve. This is something you should be doing regularly with all accounts you have, be it savings, IRA, 401K, 529 (college funds) ect...
Money can only grow where you put it. Buy food and it goes in your belly. Buy clothes and it goes on your back, Shoes on your feet... you get the point.
Keeping my main focus on one thing and one thing only. RISK, I understand to grow this account in a timely manner it must be exposed to incredible risk. However, I will be cutting losses FAST and locking profits as they become available. My chief aim here is to protect the account as much as possible from draw downs.
Compounding will be the key to success here. Several 5% gains will add up quickly. Conversely, several 5% losses will nearly destroy any chance of progress.
More than likely I will be focusing on swing trades to complete this challenge. Some day trading may occur but primarily I will be selling on the same day to avoid losses. Robinhood is not great for fast executions. Swing trading will provide me with the best opportunity to compound gains.
So lets get this thing started.
Account balance Starting $100, Account balance at time of writing $112 (62 shares) WPCS currently open.