This content outlines a blueprint for new day traders with small capital ($100) to grow their portfolios to millions by focusing on mathematically proven tactics, emphasizing risk management, compounding, finding a statistical edge, and diligent journaling.
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So, you're new to day trading and have a
very small amount of money in your
account and you want to grow this
balance as quickly as humanly possible.
So, you can have millions of dollars and
sail your private yacht to pick up a
fancy pizza in Italy. Now, I get it. Not
everybody has hundreds of thousands of
dollars to start out with. You may only
have, dare I say it, $100.
That's exactly why in this video, I'm
going to show you my blueprint to grow a
portfolio with only $100 in it and
perform mathematically proven tactics to
grow this balance to a thriving,
successful portfolio with millions of
dollars inside. To start us off, we're
going to start with one of the most
important tactics that helped me the
most when I was a beginner trader, and
that topic is risk management. Now, I
know risk management is probably one of
the most boring topics to talk about.
boring. But I'm telling you right now,
it doesn't matter how successful your
trading strategy is. If you don't have
good risk management, you will not grow
your account. If your risk management is
bad, honestly, you're better off going
to the casino and putting all your money
on red because you're basically gambling
at that point.
Doesn't account for think of your
trading account as a lifeboat. Every
dollar is a passenger you need to
protect. and too many passengers and too
many routes, your lifeboat, well, it's
very likely it's going to sink. If you
truly want to grow your account, you
have to aim for longevity and consistent
profits. The reason why trading with
high risk is a problem is because of a
little thing called consecutive losses.
I don't care how good you think your
trading strategy is, every trading
strategy will have consecutive losses.
If you have five or seven losses in a
row and you're risking 20% per trade,
your lipbo, well, let's just say your
lipo is going to be at the bottom of the
ocean very quickly. This is exactly why
some of the most successful traders out
there follow what's called the 2% rule.
The 2% rule is simple. Only risk 2% of
your trading balance per trade. Let me
show you why. This This is a trading
simulator. We're going to start with
$100. Have a win probability of 60%.
Have two wins for every losses. 500
trades and finally we'll risk 20% per
trade. Now, this this is absolutely
wild. Even though we have a successful
trading strategy with a win rate of 60%,
meaning we're winning more than we're
losing, even though our current strategy
is successful, our risk has the
potential to absolutely ruin this
strategy. For example, the key statistic
we want to focus on is the max draw
down. So, look at this. If we risk 20%
of our capital on each trade, our
biggest max draw down is 90.4%.
Meaning there's a probable chance that
if we continuously use this exact same
setup, we would potentially end up
losing close to 90% of our money we
initially invested. Gone. Setup
inflames. That money gone. Even though
we have a successful strategy, could you
handle a 90% loss? Probably not. And
that's just 20% risk. Let's see what 50%
looks like. Yeah, 100% draw down and the
average is 99%. That's no bueno. But
take this exact same scenario and add 2%
risk per trade. The biggest amount we
could potentially lose is 15%. That's
definitely better. Now, I get it. If you
want to double or triple your account
balance within a day, you're not going
to get there while trading with 2% on a
$100 portfolio. Hell, even 10%. You have
to risk more to get higher returns like
that. Now, I completely realize not
everybody has the same risk tolerance.
Some of you might be some crazy lunatics
that have insanely high risk tolerances.
Some of you might like to gamble. Some
of you want to make millions of dollars
with only a hundred bucks. So, I know
what you're thinking. 2% is absolute
garbage to me. Which I get that. But if
you truly want to grow your account not
only efficiently, but consistently, it
has been statistically proven that using
the 2% rule is the best way to do that.
If you're using just 2%, you can handle
a lot more consecutive losses compared
to if you're using 20 or even 50%. So,
if you like math, profits, and a lot of
[ __ ] money, use the 2% rule. But just
because we have good risk management
doesn't necessarily mean we're making
that money.
That brings me to my next step, the
power of compounding. Now, in order to
make money, we have to understand a key
concept called compounding. Imagine
you're rolling a small snowball at the
top of a hill. At first, it's tiny, just
like your $100 account balance. Boom,
roasted. But as you keep rolling, that
snowball picks up more snow with each
turn. By the time it's halfway down the
hill, it's [ __ ] massive. Each
rotation adds more than the last because
it's picking up the snow from all the
previous turns. That's compounding,
baby. Every small win matters. It
becomes part of the base for all future
wins. Let's put this into perspective.
Say you're making just a measly 1% gain
on your account each and every week.
Now, I know 1% it's a low number and
probably isn't a lot of money for you,
but over a year, thanks to compounding,
that's roughly a 67% total gain. That
means $1,000 could become about $1,670
by the end of the year. And that's just
with a measly 1% every week. If you got
that number to 2% each week, your
account would double within under a
year. Yeah, you starting to see what I
mean. Once your little snowball gets
later down the hill, that could
potentially be millions of dollars every
year. It's not about hitting a home run.
It's about hitting consistent base hits.
So, you remember our little 2%
riskmanagement tactic that you guys
complained about? This is where it pays
off. By avoiding big losses, you keep
that snowball intact to roll another day
and another day and another day. Protect
your capital so it can compound. Guard
your capital from big losses with your
life. Your main priority is to make sure
that compounding engine continues to
operate. One giant loss can stop our
snowball completely. Don't let that
happen. So, we got our risk management.
We now know about compounding. Now's the
fun part. Finding your edge. Now,
there's a lot of ways to do this.
YouTube videos, books, or your uncle
Larry. Hey, I'm Larry. It's kind of up
to you. I personally like the YouTube
option just because, you know, I'm a
visual guy, so I like to watch videos.
Plus, that Larry guy is kind of weird.
But I post strategy videos all the time
and all of them have a statistical edge.
So you can simply look through those to
find a strategy or you can find another
YouTuber strategy. Kind of rude, but
moving on. It doesn't really matter how
you find your edge. What matters is you
actually test the edge yourself. Find a
strategy, go to your charting platform,
and actually back test that strategy.
What's the win rate? How many wins? How
many losses? How did it do? Is it
actually profitable? These are all
questions you yourself should know. And
if you don't know, well, you got to test
it. Now, I get it. Back testing, it's
basically work. Nobody wants to sit down
and put in the work to test a strategy.
But remember that whole snowball thing?
If you don't have a statistical proven
edge, yeah, that snowball thing, it
doesn't work. So, this is definitely the
most crucial step in growing your small
balance. If you want the millions of
dollars, put in the work and start
testing. So, now you should have a
statistical edge or basically a back
tested trading strategy. Now, it's time
to do the final step in the blueprint,
and that is to journal. Now, I'm not
talking about dear diary, today I made
my first trade type of journal. I'm
talking about a system to easily
identify the history of your trades,
entries, exits, was it profitable? Did
it fail? If so, why? All of these
questions should be answered for each
and every trade. But why would you waste
your time doing this? Take Conor
McGregor for example. Conor McGregor, if
you don't know, is a UFC fighter. One
day he was watching back the tape and
noticed his opponent moves his right
hand slightly before throwing it. So he
went to the gym, started practicing that
exact same scenario where he slightly
moves his hand and he counters. Then the
big fight comes and within 9 seconds
this happened. Conor relax and smiling.
Oh Jesus. My point being if Connor never
looked back at the tape he would have
never known to do what he did. Same goes
with trading. You can look back at your
trades and say, "Oh, whenever I trade
out of boredom at 2 p.m., I lose." Or,
"My best trades happen when I follow
trends instead of trying to pick
bottoms. Those insights are priceless,
and just like Connor, you only get them
by reviewing the tapes. You don't need
anything fancy. A simple spreadsheet or
notebook works. I personally use a site
called Trader View. It's basically a
site where you can just upload your
broker statement and Trader View gives a
lot of useful metrics like each trade,
if it was a win or loss, and overall how
profitable you are. No, this is not an
ad for this site. Just thought it was
pretty cool. I'll leave a link to them
in the description. So, this all makes
me feel very sentimental. Making money
in stocks really isn't about getting
Lambos overnight. Sure, it can
definitely get to that, but in the
beginning, it's really about honing in
on your edge, consistently improving set
edge, and keeping that snowball rolling.
And on top of all of that, keeping track
of your progress. This mission isn't for
the weak. There will be losses. There
will be days where you question if
you're even cut out for this. There will
be nights where your balance is red and
all you have left is the trust within
your statistical edge. But I can promise
you one thing. If you actually apply all
of these rules to your trading, you will
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