Don't fool yourself into a false sense of security.

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

I once had a student with only $600 in his account as starting capital, and he was extremely nervous at first. I set a simple rule for him: within a month, his account grew to $6,000, and in 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 will elaborate on this system, which is especially suitable for friends with limited capital who want steady growth.

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

What is the most common way for small accounts to fail? Going all-in at once, then having your psychological defenses collapse.

My approach is this—suppose you have $600:

$200 for intraday trading. Focus on Bitcoin and Ethereum, the two main coins. A 3% fluctuation range is enough for you to secure profits, then take your earnings and exit immediately. Treat 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 split it this way? Because 80% of the crypto market time is actually in consolidation. 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 to keep your mindset, and capture big trend profits with swing trading. The reserve acts as your ace, giving you the chance to turn around at any moment. The reason my student survived the big drop in May was because he kept his reserve funds untouched; when prices fell, he had the capacity to add to his positions.

**The second core principle: Follow the trend only, resolutely avoid wasting in consolidation**

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, only to have profits 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. During sideways movements, treat them as background noise. When the market repeatedly tests 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. Wait until the weekly chart breaks through a key level and the price shows 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.