On surviving as a trader with a small bankroll...Ken's question on trading size got me thinking. So many on this thread and in the trading literature caution against beginning trading with less than (take your pick) 50k, 100k, 200k etc. Yet, consider this: someone on this thread suggested a while back the best way to learn to trade might be to trade only 100 lots initially and just focus on preserving your bankroll rather than making money--just to study entries, exits, patterns, indicators, stock behavior etc. Of course, one wouldn't even begin doing this with real money till after considerable study, market watching, such as KM mentioned she did, paper trading or perhaps (ahem...) whatever one has learned from previous misadventures in the markets.
Suppose one set up a trading plan to trade 100 or 200 lots only of stocks under $10 (or $15 or $20), with a definite, focused strategy using stocks screened to meet some optimal criteria (such as Trader Alan's Dip Trips, or tradehards' under $10, plus one's own further DD, of couse), limited oneself to one trade a day or some such discipline, "cut your losses and let your profits run" with a preset dollar stop limit and perhaps an indicator or pattern exit signal such as discussed by the intelligent speculator on this thread, used a $10 broker like oh, say, Datek <g>, and kept and studied a daily trading journal for six months. Sure, that wouldn't provide a living but it seems to me one could nurse a 10k bankroll for some time and even build it up so that larger lots and/or higher priced stocks could be considered. Is such a strategy (or any other) really inevitably doomed?
Maybe it's just my aging hippie idealism (had a ponytail for twenty years before I cut it off and went back to grad school <g>), but it just seems wrong to say there is NO viable trading strategy for the determined and disciplined little guy or gal with 10 or 20k. I would really appreciate a serious consideration of the above by any or all of you trading pros on this great thread.
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