Many people think that having a small principal means no chance to turn things around. In fact, the opposite is true — a small account size is precisely the best stage to refine your trading system. In my long-term success stories, traders who started with just a few hundred dollars often understand risk control better than those who began with large capital.

I once had a student with only $600 in his account, and he was extremely nervous at the start. I set a simple rule for him, and within a month, his account grew to $6,000. After three months, it reached $20,000. Throughout the process, he never experienced a margin call, and his mindset became much more stable.

What’s the key? It’s using the right method. Today, I’ll explain this approach, which is especially suitable for friends with limited capital who want steady growth.

**The first core principle: Divide your funds into three parts and always leave yourself a backup**

What is the most common way for small accounts to fail? Going all-in at once, causing the psychological defense line to collapse.

My approach is this — suppose you have $600:

$200 for intraday trading. Focus on Bitcoin and Ethereum, the two main cryptocurrencies. A 3% fluctuation range is enough for you to secure profits, then exit immediately, treating it as your daily pocket money.

$200 for swing trading. Wait until there are clear signals on the weekly chart before acting. Hold positions for about 3 to 5 days, aiming to capture the fat part of the trend.

The remaining $200 stays untouched. I mean really don’t touch it — even if Bitcoin drops to $10,000, don’t add to your position. The purpose of this money is to serve as your insurance for a turnaround in life.

Why divide it this way? Because 80% of the crypto market time is actually sideways. If you use all your funds for intraday trading, transaction fees will slowly drain you; if you use all for swing trading, you won’t withstand the sideways days, and in the end, time will wear you down. By splitting, you earn small, stable profits intraday, capture big trends with swing trades, and keep a safety net that allows you to reverse your position at any time. The reason my student was able to withstand the big drop in May was because his backup funds weren’t touched; when prices fell, he had the capacity to add to his position.

**The second core principle: Follow the trend only, never waste energy in sideways markets**

The fastest way for small funds to die is overtrading. The habit of thinking missing any fluctuation is a loss, trading ten or more times a day, results in profits being eaten away by fees and slippage.

The real way to make money is this — identify the nodes where the trend forms, then follow the trend’s direction. Treat sideways movements as background noise. When the market repeatedly fluctuates between 20,000 and 22,000, you don’t need to jump in every time to buy the dip or sell the top, wasting energy and costs. When the weekly chart breaks through a key level and the price begins to show a clear direction, that’s your opportunity.

The core of this system is to use the least trading frequency to achieve the highest signal-to-noise ratio. For accounts with limited capital, each trade’s cost ratio is high, so every trade must count.