The Real Small Account Secret

In the last few years there have been lots of options courses pimped on the internet aimed at traders with “small accounts”, which in the trading business typically is lingo for accounts with a principal of less under $25k. These types of trading programs offer trades that are marketed as “geared for small accounts”.

Spoiler alert: there really is no difference in trades between a small account and a large account aside from the size of the trade.

If you have a $25k account and you risk 1% on each trade, that’s $250. If you have a $100k account, you risk 1% on each trade which is $1000. That really is all there is about it.

Specifically as it relates to options, the smaller account takes some trades off the table due to risk. For example, you might not be able to trade a vertical call spread in Amazon using $20 wide strikes, because it would bump your risk up to 4%, which is way too much capital to be at risk.

This is where the wool is pulled over traders with accounts of $25k and smaller: this is still your hard earned trading capital that you want to protect.

Most of these small trader account courses are created by traders with large $1 million and larger trading accounts, they peel $10k out of that and start a small trading account.

In most cases, what they do is setup a few of these $10k accounts and trade them like they are dying tomorrow. Whichever one they don’t blow up is the one they use as their success story.

How it typically works:

Account 1: Start with $10k, after 2 months blown up and down to $200.
Account 2: Start with $10k, make a bunch of lucky traders, up to $19k after 2 months
Account 3: Start with $10k, blow it up in 2 weeks and down to $100.

With this new small $10k trading account, they take outlandish risk, sometimes as much as 10% on a single trade.

Make no mistake: These are all lotto ticket trades. To them, the $10k they peeled out of their $1 million account only represents 1% of their trading capital.

So they are treating it like a lotto ticket because if they blow up their $10k account, it’s only 1% of their trading capital that’s gone!

For them, it’s not a huge deal in the scheme of things. But to you, losing 10% of your trading capital on only one of those trades should be devastating! DON’T BE THAT GUY!

To you and most other people out there, someone that saved and worked hard to build up to $10k or $20k, that is money you worked hard to save. Blowing that up IS a big deal to you and it would be devastating.

This is the very reason I always post every single of my trades LIVE in my online trading floor, which even includes real time push alerts to my members’ mobile phones.

There’s no monkey business, no picking out the best winning streak from several parallel trading accounts.

Also there’s no advertising of short term winning streaks or one time outlier wins whilst ignoring a long series of losses.

Plus all our trades are posted here for the entire world to see.

Meaning there’s no hiding from the truth, no matter what. We keep a clean ship here at Red Pill Quants.

Plus when you sign up to RPQ Unlimited, you’ll receive all the trading education you will ever need to be a successful trader.

We believe it is crucial to immediately start growing your trading account just like a professional: slowly and consistently.

That is why we are spoon feeding you live quant trades that you’ll place alongside us. Trades from proven market specific strategies, with a proven track record that institutional firms keep under lock and key.

A LIVE cumulative P&L with all trades over the past year can be found here.

You can sign up right here.

See you on the other side.

  • Mike
  • 3 weeks ago

About the Author

Hey there, I am one of the founding members of Red Pill Quants. I used to work as a systems engineer in Silicon Valley until I left the industry in 2008 to become a full time quant trader. It's been fun ever since.