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Are you ready to start the year fresh and grow your small account from $500 to a million in 6 months? Just kidding, there’s none of that marketing crap BS here. If you want to set realistic goals to grow your small account in 2022, here are the 3 important tips to follow.
As someone who has been through probably some of the same struggles and lost big buying breakouts and bag holding losers, I wanna share some realistic tips to help you get started with growing your small trading account.
I’m confident to say that these tips will apply to traders of all levels from complete beginners to experienced, to the Lamborghini gurus who never lose.
1. Review your trading performance from 2021
First and foremost, we cannot improve our trading in the future, for the rest of 2022 if we do not go back and analyze the past, which is how we did in 2021 and analyze both our strengths and weaknesses.
For myself, after reviewing all my trades from 2021, I see that one of the biggest downfalls is not having the patience to let my trades work. A lot of times after 3 to 5 minutes I get impatient with a trade and I either cut it for a small loss or a small win. Only to see the stock breaking out and run 1 or 2 more points according to my original plan after I exited the trade.
Maybe it’s because I’m a millennial, I’m young, or so my grandma tells me, but I really need to work on patience in trading, and probably the same way in dating.
Some really good examples are this CLVS long trade. If you are on my email list for the free weekly watchlist, you probably remember me talking about this ticker once or twice in my emails. Looking back, I had a really good read on the stock, and I was watching and observing this stock for about 2-3 weeks.
Ideally, we want a ratio of 1 to 3 risk reward, both on the potential trading setups, and the actual wins and losses from your trades. So I think that’s something worth making note of. And fortunately, adding to make my winners bigger is one of my strengths from 2021.
It was a goal of mine at the beginning of 2021 to start adding bigger to my winners, and cut my losers small with starter size. While my weakness is not being patient enough to let many of my small losses and small wins turn into big wins, some of my most notable bigger trades in 2021 were from adding bigger size to the winners when I recognize that this is an A+ set up, and the stock has a lot of upside on the daily chart. Which allows my overall risk reward on my trades to be a lot better than 1:1.
So my question to you is, have you gone back and reviewed your best and worst trades of 2021? Are your weaknesses such as chasing breakouts, not cutting losses quick enough, or too biased at all times long or short?
What are your strengths and things that make your bigger winners? Are you able to switch bias quickly from short to long when a low float stock is squeezing with volume? Or did you really dig into SEC filings this past year to add to your conviction when playing penny stocks.
So it’s extremely important to go back and analyze how you did in 2021 with a birds eye view.
You want to lean into your strengths and enforce them in 2022, while reducing your weakness and taking measures to prevent repeating the mistakes that’s creating those big losers again.
2. Have Discipline
In my opinion, there is no day trading strategy that is the secret sauce. There is only good trading discipline. Let’s be real here, it doesn’t matter if you have the best trading strategy in the world, if you do not have the discipline to execute those so-called Lamborghini setups or patterns.
The stock market is a beast that’s ever changing, everyday there’s something different, especially when you’re trading volatile penny stocks. So it makes sense to keep the few things you have in control constant and grounded.
For me, I have a rigid pre market planning process and in general I have a set daily routine everyday from 7:00AM market time to around 6:00pm, 2 hours after the market closes. Yes that does mean I wake up at 4am everyday on the west coast here unfortunately and I’m technically working 11 hour days.
It’s important to establish a constant routine that you can repeat every single day, it doesn’t have to be for the entire day like I do, because I’m OCD, and I have no life. But you should at least have a routine for the hours that you are trading, even if that’s just 2 hours in the morning before you go to work or school. I have done exactly that myself, and I’ll be making a video on that topic soon.
Also I highly recommend reading the book Atomic Habits by James Clear. This book will help a lot with your trading psychology and setting good trading habits for 2022.
3. Focus on ONE trading setup or strategy
The next tip I have for you to grow your small trading account in 2022, is to focus on just 1 or 2 strategies or set ups that you are good at, and block out everything else.
If you are a better long trader on a low float penny focusing on bounce strategies after a stock sells off to a previous support level, then just wait for those set ups to occur. It doesn’t matter if other traders are making millions of dollars on social media shorting penny stocks or following chat room alerts, if that works for them, that’s great. But if that’s not a strategy that makes you money, then it’s a potential distraction.
Vice versa, if you’re a better options trader who can make consistent money on covered calls or naked puts on blue chip stocks, then stop jumping around from small caps or OTC’s.
The truth is, there are many different ways to make money in the market, but it’s too easy for beginner traders to get overwhelmed by what everyone’s saying out there and experience analysis paralysis.
Only after I started focusing on one set up at a time, that I found that I was really good at longing for mid cap stocks that have positive catalysts such as biotech data and good earnings. And that’s what my focus was for the first year.
While I was building my small account with that one strategy I knew I was good at, I had another paper trading account open on the side and practiced long small cap penny stocks. I would go back on Thinkorswim On demand to continue practicing trading on the weekends.
That’s my suggestion for you, find 1 focus and become very good at it. Maybe it’s studying SEC filings on penny stocks that have potential dilution such as at the market offerings, and then swing those stocks short.
Become an expert at that one set up that you can repeat every single day, then only then, start branching out to a few other strategies by paper trading.
The truth is, What works for other people may not work the same for you and I. You have no idea the amount of messages and comments I get on a daily basis, telling me I should try this strategy, this spreadsheet, or that I’m missing out by not trading options or buying that amazing 100% success rate indicator.
We are all different traders. I trade momentum on small caps and mid caps from $1-$50 both long and short, and that’s what makes me money, and therefore is what I talk about here on the blog and on my YouTube channel. That’s my focus.
That’s the reason it’s almost impossible to copy someone else’s trading strategies or mirror exactly their buys and sells. There is no strategy that’ll guarantee you 100% success rate, 100% of the time.
Don’t feel like reading? Watch the video.
