Starting Small TradingHave you ever wondered why starting small always work?

A question that every new trader has to answer before starting trading is how much capital should he/she starts with? Most of the new traders start enthusiastically, and try to put as much money they can afford and when things become a bit difficult they start to lose their capital, faith and patience and forget trading forever. The only best answer is to “Start with Minimum Capital” with which you can open a trading account with a broker. Due to lack of experience and knowledge in your initial trading days, more unavoidable trading mistakes will be there and the initial objective is to keep them small.

The trick is to make the initial step so simple and small that it doesn’t create Resistance.

People unfamiliar with trading business or those who haven’t tested trading the real markets with real money has the dilemma that trading is as simple as just picking a stock, buying it lower, selling it at a higher price and make some “quick money”. Once you start trading, you realize that it more than just buying & selling the stocks or markets and will encounter with all the different aspects of trading business – Psychology Management, Money Management, and Trade Management.

So, during the early days, it is more about learning how to convert your research & analysis to a real trade or how to manage a trade when market is going against you or how to maintain your calm when you have consecutive losses or how to restrict your losses and protect profits and many more ……

It is always advisable for new traders’ to start with a small account to learn & experience the mechanism and wide aspects of the market, learn how to choose the stocks or markets to follow and trade, structure and formulate the trading plan & strategies, training and inspiring self at every step to see real insights, and putting strategies to test on your chosen market everyday then you will be in a position to look at the nuggets all together.

With time and experience your learning curve starts to slope upwards and if you manages to take care of your trading account wisely, follow the formulated rules and policies as planned then you start to make some consistent real money from the markets and this proves yourself that you are ready to take responsibility for more money than before.

It`s always better for any new trader to start and test with small than committing big.

Conversely, if you manage your trading account poorly, don’t put in the necessary efforts or trade more on hope than facts and not following your trading plan and strategies then the market will snatch your money, give it to another trader, and will throw you out forever.

Lastly, starting small always make sense for a newcomer to the markets because it is always good losing small than all. Even if you lose your small committed initial seed capital during this learning phase, you will still be in the market. You can come over again after refining your trading strategies; enter the market with the capital set aside and this time with incomparable and priceless learning & experience.  But think of the case, where you put all the money you had as the trading capital, and loose it then you will have no way to come back and trade the market again.

 So, before jumping on and rushing to enter the markets with a large seed capital, ask yourself how much do I know about the markets or trading business? Or do I possess the trading skills to start big with my hard earned money? Or whether I am ready to take this big responsibility with no experience and knowledge?

No matter how great the talent or efforts, some things just take time. You can’t produce a baby in one month by getting nine women pregnant. Warren Buffett

  • Don’t be too anxious to trade Big early
  • Do not risk money in a stock you don`t know anything about.
  • Do not trade on hope, fear, tips, or news.
  • New traders should avoid taking leveraged and intraday trades. So focus only on stocks positional trading
  •  “Believe in Yourself” and have faith in India, and LASTLY…

Enter the Trading Business to Stay Their “FOREVER”


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Have you ever Wondered why Starting Small always Work in Trading Business?
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4 thoughts on “Have you ever Wondered why Starting Small always Work in Trading Business?

  • March 19, 2016 at 3:27 PM


    First of all i’d like to congrates the team for this wonderfull,motivating initiative,
    I want to thank author of for this inspiring & guiding article for me and for millions others like me.
    Sir,my name is amit,a research student,i want to learn trading options but now at current scenario of hiked lot size,will it b a smart choice for person with limited money in hands as the mobile shop person in this article what are the alternative we have now to get in to FnO segment ? Pl Guide.


    • March 19, 2016 at 3:31 PM

      Dear Amit

      Thanks a lot for taking you time for sending us your wonderful and motivating thoughts. We are really happy to hear the positive outcomes of our heart full efforts and initiative to help traders across to be independent and learn the skill of trading.
      Also, we are very happy to know your interest and willingness to learn about the markets and the opportunities available.

      Please bear with us for this big reply.
      Regarding your question for a trader with limited resources, We believe that “Big Businesses are big because of Big Ideas not Big Money” and we have a strong belief that “ALL GREAT THINGS START SMALL”.

      Also, being a trader myself, I strive to learn and improve my market knowledge & understanding so that I can achieve higher end of Reward to Risk.
      The idea here is to be good with your market research so that you can enter the market with very small or less risk. So, for this hiked lot size, the trader has to prepare a trading plan with strict money management rules which can help him manage and risk small part of his capital on every trade.
      And as the article Have you ever Wondered why Starting Small always Work in Trading Business? says, at first learn the mechanism of the market, structure and formulate rules your trading plan & strategies, putting your strategies to test, trading on facts and strictly following your trading plan and strategies and keep on refining it to achieve your trading goals. Then you will be in a position to look at the nuggets all together.

      To put it simply, if you are trading Bank Nifty Options then understand the mechanism and price movement of Bank Nifty Future to come up with some directional and trading view on the index so that you can enter the market very close to the reversals with strict stop losses in options. You can also refer stop losses as per the Options Chart. Then keep on refining your trading system and plans accordingly as per the results.
      So, start analyzing the bigger time duration say Weekly, Daily & Hourly chart of Bank Nifty Futures and get in close by analyzing the small time frames like 15 or 5 Minutes to get close entry level with small stop losses. Take a directional view as per the big charts and setups and take close entries on the smaller time frames to achieve higher reward to risk ratio, i.e. Risking less to Reward with more on every trade.
      One day, you will be able to enter the trade with very small risk and hopefully with very large number of lot size.

      We truly believe that learner and effortful people like you will surely have a reward full and better trading career. All the very best.

      You can refer to the articles below to get answers to your questions. These will give you a better understanding on Trading Index Futures, Learning from the Story of Trading Legend – Jesse Livermore, and how to frame a trading plan and learn more about money management and trade management rules.

      12 Step-wise Trading Rules for New Traders to be Safe in the Market
      How a 14 year Old Kid Transformed Himself to Become the Greatest Trader of the Wall Street?How to Trade Bank Nifty Futures?
      Part IV – Getting Started With Trading – Importance of Developing a Trading Plan

      Thanks for giving us an opportunity to serve you and we are very happy to connect with the traders like you & be of any help.

  • August 11, 2016 at 3:38 PM

    I have started the trading with a small amount,sometimes I have traded with Rs 500 & traded Suzlon with margin trading.
    Slowly I have increased the amount & I am happy with it

    • August 11, 2016 at 4:29 PM

      Dear Abhijit
      Good to know that you are climbing up the stairs one by one.. Keep working, keep refining your trading ideas…. We are sure one day you will surely make it very big.. We wish you all great in the future… and a lot of profitable trades…