A recurrent theme in the queries put before me is how best to become wealthy by trading. We all want that of course. But if it was easy, every trader here would be wealthy already. The question I am asked is: “Can it be done if one starts small?” IMHO it can be done and the best way is to just focus on doubling. Doubling a trading account is not all that difficult, particularly in a bull market, if one is not too greedy and thereby making stupid mistakes that cause him/her to give their wins back to the market repeatedly.
Think about it – start with a $1,000 account and just double it 10 times. You are at a million dollars.
If one is thinking the numbers involved, it sounds too difficult. Make $1,000,000 trading starting from $1,000??? No way, it seems… But is it inconceivable to turn $1,000 into $2,000? Not at all. Many people reading this column doubled their trading account last week. It’s just a matter of scale. Turning $64,000 into $128,000 is the same as turning $1,000 into $2,000.
Several weeks ago my 12 year old son started a small trading account. Trying to get him excited about trading, I have been trying to teach him how trading is done. We have been focused upon this doubling process, without leverage. After some 5 weeks his account has doubled 4 times. 4 out of the 10 doubles are done. Only 6 more doubles to go and he will be “rich” by most people’s standards. Can he do that before the end of this year? My guess is yes. He just has to make sure he doesn’t get greedy and give his winnings back in some stupid leveraged trade that gets him margin called. Doubling a trading account in a bull market is not that hard, if you do not make a series of stupid (i.e., greedy) trades – right?