You don't need to open large positions in a large account

In the forthcoming segment of our series on successful traders, we will examine the strategy of a trader who skillfully consolidated multiple FTMO Accounts into a single FTMO Account worth $400,000. Consequently, this trader was able to achieve substantial returns despite engaging in a relatively small number of trades with positions of moderate size.

Modern prop trading offers the opportunity to trade with account sizes that many might not typically attain. However, reaching an FTMO Account does not mean one should immediately start opening the largest possible positions with the aim of rapidly amassing wealth. A sizable account, much like the leverage available in forex trading, can be a beneficial tool but can also lead to trouble if not managed properly. High expectations and the quest for quick profits can be detrimental to both small and large accounts.

A large account facilitates higher profits (provided you have a sound strategy and achieve success) with significantly less stress. Holding reasonably sized positions in a large account instills confidence, knowing that during a downturn (which happens to everyone), you have ample margin to weather a longer losing streak without breaching our risk management guidelines. When mentally composed, you are less likely to take trades that deviate from your strategy, thereby reducing the likelihood of errors.

This concept is illustrated by today’s trader, who operates a $400,000 FTMO Account yet does not feel compelled to trade unnecessarily large positions. His balance curve indicates a cautious initial approach. He remained in the black throughout the trading period, which undoubtedly supported his mental well-being. His high consistency score is the cherry on top.

Thanks to this approach, even occasional losing trades posed no issue, and he did not have to contend with loss limits, never approaching them. His total return of $24,578 is commendable, though in relation to the account size, it may not seem as impressive. However, we reiterate that there is no game in percentage returns.

The trader was active for 13 trading days and executed 20 trades, amounting to 96 lots. This indicates an average of one trade per day with a typical position size of around 5 lots. This is a conservative approach for a $400,000 account, which is certainly commendable. The average Risk Reward Ratio (RRR) of 1.24 is not outstanding, but with a 65% success rate in trades, it is sufficient for a satisfactory return.

The trading journal reveals that he is a quintessential intraday trader who closes positions within the day and avoids holding them overnight. The trader generally entered Stop Loss and Take Profit orders, which is encouraging, but there were instances where he did not, which is not advisable.

Interestingly, the trades that resulted in losses were often those where the trader did not set a Stop Loss or Take Profit, although it is unlikely that there is a direct correlation between the setting of SL and TP and the profitability of the trades. However, even in cases where the trader did not set an SL and TP, the losses never exceeded $3,200, suggesting that the trader was likely in control of his positions.

The trader focused on only two instruments, gold and bitcoin. He began with a few bitcoin trades in the initial days but then primarily concentrated on gold, where he ultimately made most of his profits. He opened most of his positions when the European markets opened and made the most significant profits on these positions.

The trader was indifferent to long or short positions but made considerably more money by speculating on the instrument’s growth. This is noteworthy, especially since he made money on gold at a time when it had reached an all-time high and was in a downtrend. Intraday trading can yield profits on upward speculation even in a downtrend, provided there is good risk management and an element of luck.

In the image below, we observe three trades that resulted in substantial profits for the trader. All were executed when gold reached new all-time highs and began the aforementioned downtrend. In the first trade, the entry was well-timed, but the trader exited prematurely, not allowing the trade to reach the TP set with an RRR of 4.6. Despite this, the trade, which had the highest profit, ended with an RRR of 3:1, which we can consider a good trade.

In the second instance, the trader speculated on a resurgence of the gold price after a downward swing and a bounce from a local support level. Here too, he exited the trade a bit early, but this time it was beneficial as the gold price continued to decline. Ultimately, he made a very good profit.

In the third case, the outcome mirrored the first. Good entry, an initial RRR set at 2.5:1, but an early exit for an RRR of 1.5:1. However, this trade also turned out well, and the trader clearly opted for smaller profits rather than waiting for the price to reverse, which could have resulted in the trade ending at break even or in the negative. Clearly, during this trading period, this approach paid off for him.