Written by: Adam
Translated by: Shenchao TechFlow
Before getting to the point, please remember that trading is a complex and high-risk activity.
There is no method that allows you to quickly grow an account in a short period without experiencing any losses.
In fact, those who can quickly grow their accounts often take on significant risks, even close to going all in.
The focus of this article is not to tell you to patiently wait for ideal market conditions, nor to teach you how to analyze the market deeply.
On the contrary, I will share some methods to help you achieve rapid account growth while reasonably controlling risks.
If you are not yet familiar with basic concepts like 'risk management', I strongly recommend you read this article on risk management first.
If you think this article is helpful, feel free to check out other content on the blog or join the Tradingriot Bootcamp for the complete video course, join private Discord groups, and get regularly updated trading strategies.
Why choose to trade in niche markets?
If you primarily trade large markets like BTC, ES (S&P 500 futures), major forex pairs, or gold,
You will be directly facing retail traders like yourself, while also competing with large institutional players, quantitative companies, and others.
This is mainly because these markets have extremely high liquidity, allowing large capital players to easily participate in competition.
While trading these markets is not impossible, if you don't have sufficient capital, there are actually more advantages in trading in lower liquidity markets.
For example, many altcoin derivatives, NFTs, or on-chain coins do not attract large players much, as the liquidity in these markets is insufficient to meet their trading scale needs.
When I started to delve deeper into the altcoin market, I often found the clearest trading signals in lower liquidity markets.
At first, I was confident about these 'low-threshold' markets, but when I tried to execute large positions, I found that my orders stood out on the order book, which made me realize the disadvantages of insufficient liquidity.
However, for small account traders, this issue does not need to be overly worried about, as this liquidity issue will only really affect you when your order sizes reach high five or six figures.
Taking Lina on Velo as an example, from the chart, it's visible that potential breakout signals for Lina could be observed days before the breakout occurred.
Such opportunities can yield significant returns, but we must also consider the potential risks.
By checking Lina's transaction volume and open contracts data on the Laevitas platform, we can see that Lina's daily transaction volume was 16 million, and open contracts were 4.5 million before the breakout occurred.
If this trade fails and you hold a large position, your stop loss might lead to actual losses far exceeding expectations due to slippage. However, for small account traders, their position sizes are smaller, and stop losses are often triggered near invalid points, thus avoiding this issue.
Low market cap alternatives to derivatives are not the only things you can participate in. On-chain tokens or NFTs are similar.
When trading, the most important thing is to be aware of where the 'meta' currently is.
For example, NFTs were very popular a few years ago, but now they have disappeared.
You need to understand the speed of information dissemination in this field so that you can avoid taking unnecessary risks and also not miss out on significant gains due to premature selling.
On-chain trading is very challenging. Although you may see many success stories on platform X, the reality is that the likelihood of turning '1 SOL' into '1000' is very low.
In on-chain trading, there are some unique strategies that can be used, such as tracking different wallets, analyzing position distributions, or simply relying on common sense to avoid tokens that are heavily promoted by KOLs.
Moreover, you will find that using simple support and resistance levels or trading indicators is usually enough to handle trades, especially for large market cap tokens with lower risks of running away.
Day Trading
Prices have fractal characteristics. This means that if I show you a chart, you may find it difficult to determine whether it is a daily chart, monthly chart, or 5-minute chart.
In addition, for highly liquid markets, if you are not familiar with them, it is also difficult to identify which specific market it is.
For example, the above shows the 5-minute chart of XRP.
If you choose swing trading, the trading frequency will be relatively low. Even if you make a profit, most of the time you are just patiently waiting for opportunities, which typically only occur 1-2 times per week in each market.
I will discuss swing trading in detail later, but day trading is different; it provides instant feedback with a lot of small fluctuations to operate on every day.
Therefore, if you engage in day trading and execute a small number of trades in each trading period, theoretically, your account capital will grow faster.
However, day trading is one of the most challenging areas of trading. A slight distraction or a small mistake could cause you to lose all your profits in just a few minutes, as quickly as you can make money.
I recommend that every beginner trader try day trading, as it can give you quick feedback from the market and accelerate the learning process.
One major advantage of day trading is that you can focus on highly liquid markets, making trading scalable. If you focus on BTC, ETH, ES, NQ, gold, or major forex currency pairs, you won't face position size limitations.
Nevertheless, day trading is very difficult and not suitable for everyone. It requires high levels of focus, quick decision-making, decisive stop-losses, and various other skills.
Therefore, it is very important to formulate a detailed trading plan and strategy for each step. Once you enter a trade, emotions may affect your judgment, and that’s when the prepared plan comes into play.
There are many methods for day trading, such as operating through price trends, order flow, news, technical indicators, etc. Each method has its applicable scenarios, and there is no absolute superiority or inferiority.
If you are interested in my day trading and swing trading methods, you can check out the Tradingriot Bootcamp, which is a training course designed specifically for traders.
Trading with other people's assets
In recent years, the field of online funding companies (prop firms) has developed rapidly.
If you are new to this type of company, you need to pay the evaluation fee first and comply with trading rules in a simulated account to obtain the right to use a funding account.
This model allows you to trade with larger funds, with the only cost being the payment of evaluation fees.
However, if you are not familiar with trading, you may waste money on frequent evaluation fees without ever obtaining a funding account.
Although funding companies often spark controversy, I believe that for those who have trading skills but lack capital, this is a very good opportunity.
With the rapid expansion of this field, choosing a reputable and stable company has become particularly important. In recent years, we have seen some companies refuse to pay profits, set rules that are nearly impossible to pass, and even go bankrupt.
Here I may be a bit biased as I am directly involved in the Breakout funding company. But if you focus on cryptocurrency trading, Breakout is a very good choice. It provides daily payment services and has never refused a payment, while the evaluation rules are also very reasonable.
High time frame analysis and low time frame execution
If you find that day trading is not suitable for you, don't be discouraged. This method can also help you grow your account quickly while being easier to operate.
In fact, this method is not limited to small accounts; I have personally fully transitioned to this trading style because I don't want to spend a lot of time staring at charts anymore.
Nevertheless, I must emphasize that the experience of engaging in day trading over the past few years, researching different futures markets, and understanding market microstructure has been very important for me, and I am glad to have gone through it.
Although we mentioned that prices have fractal characteristics, key points in the market on higher time frames like daily, weekly, or monthly often elicit greater market reactions than points on a 1-minute chart. This is because more traders and algorithms pay attention to these key points on higher time frames and act accordingly.
For example, at the end of February 2023, Solana rose to the daily resistance level and then fell to the next daily support level. If a short position is established at the daily close with a stop loss based on 1-day ATR, a 2.5 times risk return (R) can be achieved within 18 days.
Of course, achieving a 2.5 times return in 18 days is quite good. But if your account is small, for instance, if the risk for a single trade is $100, then making a $250 return might not be exciting; in contrast, if the risk per trade is $10,000, making a $25,000 profit looks very substantial.
If you want to quickly grow your account capital, you can switch to lower time frames while following high time frame (HTF) trading ideas. This means that your goals remain the same, but by executing trades on low time frames (LTF), you can reduce stop-loss ranges and increase position sizes.
You don't need to switch to 1-minute or 5-minute charts; H1 or H4 time frames are sufficient. Focusing too much on low time frames may increase risk-return, but also significantly raise the risk of being stopped out before the market moves.
If you choose H1/H4 time frames, it is still possible to miss ideal entry points or be stopped out before the market moves. But in my experience, giving high time frame trading ideas 1-3 attempts at low time frame execution usually yields better results than relying solely on daily charts.
Conclusion
Trading is not easy; it takes time and patience. But as long as you manage risks well, even small amounts of capital can gradually grow into large amounts.
In trading, always try to break out of fixed thinking patterns, maintain patience in execution, and formulate a comprehensive trading plan.
