Written by: adam
Compiled by: Deep Tide TechFlow
Before getting to the point, always remember that trading is a complex and high-risk activity.
There is no method that allows you to quickly grow your account in a short time without experiencing any losses.
In fact, those who can rapidly grow their accounts often do so by taking on significant risks, even approaching all-or-nothing bets.
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 in depth.
On the contrary, I will share some methods to help you achieve rapid account growth while reasonably controlling risks.
If you are still unfamiliar with basic concepts like 'risk management', I strongly recommend reading this article on risk management first.
If you find this article helpful, you might want to check other content on the blog or join the Tradingriot Bootcamp for the complete video course, access to a private Discord group, and regularly updated trading strategies.
Why choose to trade in niche markets?
If you mainly 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 participate in competition easily.
While trading these markets is not impossible, if you lack sufficient funds, you will actually have more advantages in markets with lower liquidity.
For example, many altcoin derivatives, NFTs, or on-chain coins are not very attractive to large players because these markets lack the liquidity to meet their trading scale needs.
When I began to delve deeper into the altcoin market, I often found the clearest trading signals in markets with lower liquidity.
At first, I was confident about these 'low barrier' markets, but when I tried to execute large positions, I found my orders appeared extremely conspicuous on the order book, making me realize the disadvantages of low liquidity.
However, for traders with smaller accounts, this issue does not need to be overly concerning, as liquidity problems will only genuinely affect you when your order size reaches high five or six figures.
Taking Lina on Velo as an example, the chart shows that potential breakout signals for Lina could be observed days before the breakout occurred.
Such opportunities may yield significant returns, but we also need to consider potential risks.
By checking Lina's trading volume and open contract data on the Laevitas platform, we can find that before the breakout occurred, Lina's daily trading volume was 16 million, with open contracts at 4.5 million.
If this trade fails and you hold a large position, your stop loss may lead to actual losses far exceeding expectations due to slippage. However, for traders with smaller accounts, their position sizes are smaller, and stop losses are often triggered close to ineffective points, so they don't face this issue.
Low market cap alternatives and derivatives are not the only things you can participate in. On-chain tokens or NFTs are also an option.
When trading, the most important thing is to be aware of where the 'meta' currently lies.
For example, NFTs were very popular a few years ago but have since faded away.
You need to understand the speed at which information spreads in this field to avoid taking on unnecessary risks while also not missing 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 actual probability of increasing '1 SOL' to '1000' is very low.
In on-chain trading, there are unique strategies you can employ, such as tracking different wallets, analyzing position distributions, or simply relying on common sense to avoid tokens heavily promoted by KOLs.
Additionally, you will find that using simple support and resistance levels or trading indicators is often sufficient to handle trading, especially for tokens with larger market caps and lower risk of running away.
Day Trading
Prices exhibit fractal characteristics. This means that if I show you a chart, you might find it hard to determine whether it's a daily chart, monthly chart, or a 5-minute chart.
Additionally, in highly liquid markets, if you are not familiar enough, it can be difficult to discern which specific market it is.
For example, the chart above shows the 5-minute chart of XRP.
If you choose swing trading, the trading frequency will be relatively low. Even if profitable, most of the time you will just patiently wait for opportunities, which typically occur only 1-2 times per week in each market.
I will discuss swing trading in detail later, but day trading is different in that it provides instant feedback, with many small fluctuations to operate on each day.
Therefore, if you engage in day trading and execute a small number of trades during each trading session, theoretically, your account funds will grow faster.
However, day trading is one of the most challenging areas of trading. A momentary distraction or a minor mistake can lead to losing all your profits in just a few minutes, as quickly as you made money.
I recommend that every beginner trader try day trading because it can provide you with quick market feedback and accelerate your 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 limitations on position size.
Nevertheless, day trading is very difficult and not suitable for everyone. It requires a high level of focus, quick decision-making, and decisive stop-loss abilities.
Therefore, it is crucial to develop a detailed trading plan and strategy for each step. Once you enter a trade, emotions can influence your judgment, and that's when a pre-prepared plan comes in handy.
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 are no absolute advantages or disadvantages.
If you are interested in my day trading and swing trading methods, you can check out the Tradingriot Bootcamp, which is a training program designed specifically for traders.
Trading with others' assets
In recent years, the online capital-providing company (prop firm) sector has developed rapidly.
If you are encountering such companies for the first time, you need to pay evaluation fees first and comply with trading rules in a demo account to gain access to a funded account.
This model allows you to trade with larger capital, with the only cost being the payment of evaluation fees.
However, if you are not familiar enough with trading, you may waste money on frequent evaluation fees without ever obtaining a funded account.
Although capital-providing companies often spark controversy, I believe this is a very good opportunity for those with trading ability but lacking funds.
As this field rapidly expands, it becomes particularly important to choose a reputable and stable company. In recent years, we have seen some companies refuse to pay profits, set rules that are nearly impossible to meet, or even shut down completely.
I might be a bit biased here because I am directly involved with Breakout funding companies. However, if you focus on cryptocurrency trading, Breakout is a very good choice. It offers daily payout services and has never refused payment, with very reasonable evaluation rules.
High Time Frame Analysis vs. 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 quickly grow your account funds while being easier to operate.
In fact, this method is not limited to small accounts; I have personally completely shifted to this trading style, as I no longer want to spend a lot of time staring at charts.
Nonetheless, I still want to emphasize that the experience of day trading, researching different futures markets, and understanding market microstructures over the past several years has been very important to me, and I am grateful to have gone through it.
Although we mention that prices exhibit fractal characteristics, key points in the market on higher time frames like daily, weekly, or monthly charts often lead to greater market reactions than points on 1-minute charts. 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 retraced to the next daily support level. If a short position is established at the daily close with a stop loss based on the 1-day ATR, a 2.5 times return on risk (R) can be achieved in 18 days.
Of course, achieving a 2.5 times return in 18 days is quite impressive. However, if your account is small, such as a single trade risk of $100, then making a return of $250 may not be thrilling; in contrast, if the single trade risk is $10,000, then earning $25,000 would seem very substantial.
If you want to rapidly grow your account funds, you can switch to lower time frames while following high time frame (HTF) trading ideas. This means your goals remain unchanged, but by executing trades on low time frames (LTF), you can narrow the stop-loss range, thereby increasing position size.
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 washed out before the market action starts.
If you choose H1/H4 time frames, it is still possible to not obtain ideal entry points, or to be stopped out before the market action starts. However, in my experience, giving high time frame trading ideas 1-3 attempts on low time frames usually yields better results than solely relying on daily charts.
Conclusion
Trading is not easy; it requires time and patience. However, 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 conventional thinking, maintain patience in execution, and develop a comprehensive trading plan.