The

Dad
Formula
How to Grow Your Small Trading Account
into a Seven-Figure Net Worth
Hey there, future stock market all-stars!

Welcome to "The Dad Formula: How to Grow Your Small Trading Account into a Seven-Figure
Net Worth" Our mission is to help you turn your modest trading account into a financial
powerhouse equipped with the knowledge, tactics, and dad-inspired wisdom needed to excel
in the trading world. So, whether you're a trading rookie or a grizzled vet, this comprehensive
guide will be the mentor you need to grow your trading account.

Trading can be an emotional roller coaster filled with challenges, but it also presents a buffet of
opportunities for those eager to learn and apply the right principles. Stock Dads is here to give
you a solid foundation in trading concepts and techniques, so you can navigate the market
confidently and hit your financial targets like a true dad.

This guide covers a broad range of topics: an introduction to the stock market, trading
platforms and tools, technical analysis, risk management, trading psychology, fundamental
analysis, the significance of distinguishing trading and investing (like chores and relaxation),
and practical advice for accelerating account growth (like a lawn mower on full throttle).

By embracing the strategies and methods outlined in this Stock Dads' guide, you'll be well-
prepared to face the challenges of growing a small trading account like a true stock market
pro. Our goal is to help you establish a strong foundation in trading principles, cultivate the
right dad-like attitude, and implement strategies that can result in consistent growth and
success in your trading adventures.

We understand that trading can be a complicated and sometimes intimidating field to navigate
(like putting together that shiny new grill), but with dedication, persistence, and the right
approach, you can expand your small account into something more significant. This guide is
your comprehensive, dad-approved handbook for unlocking your potential as a trader and
achieving your financial goals.

So, put on your favorite dad hat, tuck your white t-shirt into your jean shorts, and lace up those
grass-stained New Balances, because it's time to embark on this journey together and uncover
the winning strategies for growing your small trading account, Stock Dads style!

The Stock Dads Team

I. RISK MANAGEMENT 101
Position Sizing 1
Risk-Reward Ratios 2
Diversification Strategies 5
Separate Accounts 7
Stop Losses 10

II. EXECUTION
One Cancels the Other (OCO) Orders 12
Creating a Customized Plan 16

III. TRADING PSYCHOLOGY

Your Mind, the Ultimate Trading Tool 19
Practical Trading Psychology Tips 23

IV. FROM SMALL TO BIG

Essential Tips for Accelerating Growth 26
Key Takeaways for Successful Trading 27
Risk management is like the belt that holds your pants up as you navigate the thrilling
highways of trading and investing. In this chapter, we'll dive into the basics of risk
management, focusing on the holy trinity of principles: position sizing, risk-reward ratios, and
diversification strategies.

Position Sizing
Unfortunately, gentlemen, size does matter. Consider position sizing as the ideal balance for
your investments – not too large, not too little. IT’S AVERAGE, OK?

It's all about determining the perfect amount of capital to allocate to a specific investment. By
controlling the size of your positions, you protect your portfolio from excessive losses if the
market takes a downturn. The key here is finding the right balance between risk and reward.
You have to make sure you're not overcommitting to a single trade or investment.

PAGE 1
Risk-Reward Ratios: Your
Trading Safety Net
Risk-reward ratios act as your trading guide, assisting you in evaluating the potential
profitability of an investment in relation to its risk. By comparing the possible return on
investment (ROI) with potential loss, you can make educated decisions about whether a
specific trade or investment aligns with your risk tolerance.

A good risk-reward ratio indicates that the potential gains outweigh the risks, making the trade
more attractive. This is where the “Risk of Ruin” calculator comes in.

Risk of Ruin Calculator

A risk of ruin calculator is a valuable tool used by traders and investors to determine the
probability of losing a significant portion or even all of their trading capital due to a series of
consecutive losses. By taking into account factors like the size of the trading account (because
again… SIZE MATTERS), the percentage of capital risked per trade, and the trader's win rate, the
calculator estimates the likelihood of reaching a point where it becomes challenging or
impossible to recover from losses.

Using a risk of ruin calculator helps traders assess their trading strategy's sustainability and
adjust their risk management tactics accordingly. Just as a father provides wisdom and
guidance to his children, a risk of ruin calculator offers traders and investors insights into
managing risks and making informed decisions, ensuring that the financial journey ahead is as
smooth and prosperous as possible.

Free Access

PAGE 2
How to use a risk of ruin calculator
To effectively use a risk of ruin calculator, traders should input the following data:

Account Currency: Select the currency of your trading account.

Account Size: Enter your current trading account balance.

Risk Ratio: The % of your account balance you are willing to risk per trade.

Win Ratio: The % of winning trades based on your trading history or strategy.

Average Win: Enter the average profit you make per winning trade.

Average Loss: Enter the average loss you incur per losing trade.

By entering these values, the calculator will provide you with the risk of ruin percentage, which
indicates the probability of losing a significant amount of capital. A lower percentage suggests
a more sustainable trading strategy and better risk management. You can use this information
to fine-tune your approach and minimize the risk of ruin in your trading endeavors.

You’ll quickly learn that by having a better risk-reward ratio, you can lose trades more often
and still be profitable. Of course, it’s even better when you find a strategy that has a positive
risk-reward ratio and a high win rate!

PAGE 3
Determining Appropriate Risk
First and foremost, NEVER risk more than you can afford to lose. Trading funds should be
separate from the money needed for essentials like groceries and bills. Assuming you're aware
of that, risking over 5% of your capital per trade can result in a higher rate of failure for the
following reasons:

Compounding losses: When you risk a larger percentage of your capital, losing
trades can cause substantial drawdowns. As your account balance decreases, it
becomes increasingly difficult to recover those losses since you have less capital to
work with.

Emotional pressure: Higher risk per trade can lead to increased emotional stress,
which can negatively affect your trading decisions. This may create a vicious cycle
of poor decision-making and further losses.

Reduced flexibility: A higher risk percentage means you may reach your stop loss
more quickly, limiting your ability to keep trades open and capitalize on market
movements. This constraint reduces the flexibility and adaptability of your trading
strategy.

Decreased diversification: Risking more per trade often results in trading fewer
positions simultaneously. This reduction limits the benefits of diversification and
can lead to increased portfolio volatility.

By maintaining the risk per trade at or below 5% of your capital, you can better manage the
factors mentioned above, enhancing the likelihood of a sustainable and successful trading
career.

PAGE 4
Diversification Strategies:
Don't Put All Your Stocks
in One Basket
First and foremost, NEVER risk more than you can afford to lose. Trading funds should be
separate from the money needed for essentials like groceries and bills.

Asset allocation

Asset allocation is like creating a well-rounded meal plan for your investments. You spread
your investments across various asset classes, such as stocks, bonds, and commodities. By
diversifying your portfolio like this, you can soften the blow of market volatility and protect
yourself from the risks that come with any single asset class. A well-balanced portfolio should
have a blend of asset types that cater to your investment goals and risk appetite.

Sector Diversification

Sector diversification is like investing in a bunch of different hobbies or interests. It involves

spreading your investments across various industries or sectors. This tactic helps minimize the
risk of being overly exposed to a single industry that might take a hit due to market events or
economic shifts. By investing in a wide range of sectors, you get to enjoy the growth of
different industries while reducing overall portfolio risk.

Geographic Diversification

Geographic diversification is like taking a trip around the world with your investments. It's the
practice of investing in assets from different countries or regions. This strategy can help
mitigate the risks linked to economic, political, or social factors affecting a specific region. By
including a mix of domestic and international investments in your portfolio, you can tap into
global growth opportunities while lowering your exposure to regional risks.

PAGE 5
Effective risk management
Effective risk management is the key to long-lasting success in the investing realm. By
understanding and applying these principles, you can make informed decisions, safeguard your
capital, and optimize your returns.

PAGE 6
Get Separate Accounts for
Trading & Investing
We are firm believers in maintaining separate accounts for trading and investing. The Stock
Dads approach emphasizes using short-term trading as a supplement to long-term
investing, rather than a replacement.

Withdraw Your Profits Frequently

Withdrawing trading profits frequently to fund long-term investments is so important for your
short- and long-term success. Doing so, you can significantly reduce the risk of emotionally
trading and losing the profits you've worked hard to earn. By transferring your profits into a
long-term investment account, you're less likely to take bigger risks solely because your trading
account is growing. This disciplined approach helps prevent the all-too-common scenario of
"blowing up" an account due to overconfidence and excessive risk-taking.

This strategy shifts your focus from solely growing your trading
account to increasing your overall net worth – hence this book’s
title, “Grow Your Small Trading Account into a Seven-Figure Net
Worth”.

As a result, you'll be more inclined to make rational, calculated

decisions that positively impact your long-term financial goals,
rather than chasing short-term gains at the expense of your
financial stability.

Withdraw Your Profits Frequently

Margin benefits: For your trading account, using margin can amplify your gains
and help you seize short-term opportunities. However, for your investment account,
it's better to avoid margin and focus on long-term growth and profit accumulation.

Mental clarity: Keeping your trading and investing accounts separate helps you
stay focused on your short-term trading goals without being distracted by your
long-term investments, just like using earplugs at a noisy concert.

Simplified taxes: Long-term and short-term gains are taxed differently. Separating
your trading and investing accounts makes tax preparation easier and ensures you
pay the correct amount for each type of gain.

PAGE 7
Tips for Managing Your
Long-Term Investments
Set and forget: Instead of obsessively checking your investment account, set alerts for crucial
price levels on your holdings. This way, you'll stay informed without getting overly concerned
about daily fluctuations.

Focus on the future: Concentrate on the long-term outcome. Don't let short-term market
turbulence disrupt your strategy.

Let it grow: Avoid micromanaging your investments. Give them room to grow and prosper,
just like nurturing a plant.

Combining Active Trading and Relaxed

Investing for Long-Term Success
Share the wealth: Create a plan to transfer some of your trading profits into your long-term
investment account. It's like giving your future self a pat on the back!

Trade, then invest: If you discover a stock with potential long-term value after trading it,
consider moving some shares from your trading account to your investing account. You'll enjoy
the short-term gains while retaining a stake for the long run.

Monitor taxes: Keep in mind that transferring money or shares between accounts can have
tax implications. Consult a tax professional to ensure you're managing everything in the most
tax-efficient manner.

PAGE 8
Do you love cake?
By maintaining separate accounts for trading and investing, you can enjoy the excitement of
active trading and the gratification of building a stable financial future. It's like having your cake
and eating it too (and who doesn't love cake?).

PAGE 9
Understand and Utilize
Stop Losses
Let’s chat about the importance of setting stops in your trading master plan. In this section, we
will review different types of stop orders, calculate stop levels based on market conditions, and
share some best practices for setting stops to protect your account from excessive losses.

Types of Stop Orders

Stop Loss Order: Think of a stop loss order as your financial safety net. It's an order to sell a
security once it hits a certain price, known as the stop price. This order is designed to put a
leash on your losses if the market decides to play hardball with your position. It's crucial to use
stop loss orders when trading, especially if you're new to the game.

Trailing Stop Order: A trailing stop order is like your shadow, moving with the market price
and maintaining a specific distance (either a fixed amount or a percentage) from the current
market price. This order allows you to lock in profits as the market moves in your favor while
also limiting losses if the market takes a U-turn.

Guaranteed Stop Order: A guaranteed stop order is like an insurance policy for your stop loss.
It ensures your stop loss will be executed at the exact price you set, regardless of market
conditions. Though this order might come with an extra fee, it can be a lifesaver during times of
high market volatility when slippage might occur.

PAGE 10
Calculating Stop Levels

To determine appropriate stop levels for your trades, consider these factors:

Volatility: Assess the market's mood swings by analyzing historical price

movements or using indicators like the Average True Range (ATR). Set wider stops
for moodier markets and tighter stops for calmer markets.

Support and Resistance Levels: Spot key support and resistance levels in the
market and place your stops just beyond these levels to avoid being stopped out
too soon.

Risk-to-Reward Ratio: As we discussed earlier, it’s important to find trades with a

strong risk-to-reward, such as 1:2 or 1:3. This means that for every dollar you risk,
you expect to make two or three dollars in return. Set your stop loss based on this
ratio to maintain proper risk management.

Best Practices for Setting Stops

Here are some suggestions to ensure stop losses are your friends, not your enemies.

24/7

Always use a
stop loss
Whether you're a trading newbie or a
Wall Street veteran, always use a stop
loss order to protect your account from
taking a serious hit.

Be consistent with your Avoid placing stops

risk management at obvious levels
Decide the maximum percentage of Market participants often target
your account you're willing to risk on common stop levels, which can lead
each trade and stick to it. A popular to stop hunting. Be a bit more
rule of thumb is to risk no more than 1- creative with your stop placement to
2% of your account balance per trade. avoid being prematurely stopped out.

By understanding the different types of stop orders and implementing these best practices for setting
stops, you can minimize losses, protect your trading account, and boost your chances of long-term
success in the markets.

PAGE 11
One Cancels the Other
(OCO) Orders – aka
Bracket Orders
OCO orders, also known as bracket orders, are a valuable tool in the trading world. They
enable you to place two distinct orders at once, with one order canceling the other upon
execution. Pairing OCO orders with stop orders forms a robust trading strategy, which is ideal
for busy individuals like working dads who can't continuously monitor their trades.

One significant advantage of OCO orders is the ability to remove emotions from the trading
process. By entering a trade with predetermined levels for both profit and loss, you can
confidently step away from the trade, knowing you've adhered to your plan. Lacking set levels
can lead to emotional trading, which carries inherent risks that we'll address later in a section
about trading psychology.

Here's a clearer and more in-depth explanation of OCO orders:

OCO Stop Loss and Limit Order: Set a stop loss order to limit losses and a limit
1 order to secure profits. Whichever order gets executed first, the other one is
automatically canceled.

OCO Trailing Stop and Limit Order: This pair consists of a trailing stop order that
2 moves with the market to protect profits and a limit order ready to capture gains.
As always, if one order is executed, the other is canceled.

OCO Guaranteed Stop and Limit Order: This combination acts like an insurance
3 policy for your stop loss and a limit order to seize profits. The execution of one
order results in the cancellation of the other.

Using stop orders and OCO orders together is an ideal strategy for those who want to manage
risk and capitalize on market movements without constantly watching their trades. This "set
and forget" approach allows busy working dads or anyone with a tight schedule to participate
in trading without the need to constantly monitor their positions, providing peace of mind and
flexibility.

PAGE 12
OCO Real-Life Example
Let’s look at a real-life example of how you can use OCO orders with an alert from our Stock
Dads Discord. Our analysts share exactly what they are buying and what levels they are using.
Here is an example from a swing trade alert that one of our analysts sent out to our
community.

Here, our analyst tells you exactly what stock he is buying, the price he bought in, what levels
he plans to take some profit, and where he placed his stop loss.

To execute this trade using OCO (One-Cancels-the-Other) orders on Webull, follow these steps:

PAGE 13
 Buy the stock at the
entry price of $19.

Set an OCO order to manage your

take profit and stop loss targets.

In the Webull app, go to the stock's trading page and tap "Trade" at the bottom.
Select Sell or Close by Stop Loss /Take Profit and then choose the "OCO" order type.
Enter the quantity of shares you want to sell.
Set the limit price for your chosen take profit target (e.g., $20, $21, $22, etc.).
Set the stop price for the stop loss order at $16.75. f. Review your OCO order details and
tap "Sell" to submit the order.

PAGE 14
Pro Tip
By using OCO orders on Webull, you ensure that you'll either lock in profits when the stock
reaches your take profit target or minimize losses if the stock falls to your stop loss level. Keep
in mind that you may need to adjust your OCO orders if you decide to sell a portion of your
shares at different take profit targets.

PAGE 15
Creating a Customized Plan
for Trading Success
Set goals, but not dollar amounts

You can set a specific target for your account size, such as $30,000, but it’s more important to
concentrate on developing a consistent trading process and prioritizing trading psychology
and consistency. As a result of following this process, account growth will occur naturally. With
hard work and dedication, profitability will follow. Small steps and improvements will
accumulate over time, leading to overall success.

It's essential to have a clear and realistic vision of your trading journey, tailored to your
personal financial situation, risk tolerance, and trading strategy. This vision should provide
direction and motivation but remember that placing too much emphasis on a specific financial
target can either be motivational or detrimental, depending on your perspective.

Break your main objectives down into smaller, manageable milestones that can be monitored
and adjusted as you progress, allowing for continuous improvement and adaptation.
Emphasize the importance of adhering to your process, and your account's dollar growth will
follow as a natural outcome.

PAGE 16
Creating a Customized Plan
for Trading Success
Outline your plan

A robust trading plan is essential for consistent success in the market. Begin by defining your
short-term and long-term trading goals and objectives, and select a suitable trading style, such
as day trading or swing trading. Choose appropriate trading instruments that align with your
risk tolerance and market knowledge, and incorporate a comprehensive risk management
strategy that includes risk per trade, daily loss limits, and profit targets. Your plan should also
detail specific entry and exit rules based on technical and/or fundamental analysis, as well as a
contingency plan for unexpected situations.

In addition, specify the types of stocks you intend to trade and those to avoid, by establishing
criteria based on your trading goals and style, such as market capitalization or industry sector.
Focus on profitable setups and chart patterns, like breakouts or trend reversals, and employ
preferred technical indicators and timeframes, such as RSI or MACD. Be mindful of stock
characteristics, setups, or chart patterns that have led to losses or increased risk in your
trading history and avoid them. By fine-tuning your trading plan to include well-defined criteria
for stocks and strategies, you can enhance your likelihood of achieving consistent success
in the market.

Sample Trading Plan

PAGE 17
Creating a Customized Plan
for Trading Success
Prepare a backup plan

As you experience growth in your account size by focusing on the process, psychology, and
consistency, it's important to reevaluate your trading strategy and make necessary
adjustments. These adjustments might involve modifying your risk per trade, diversifying your
portfolio, or exploring new trading instruments. A backup plan is essential for maintaining your
hard-earned gains and ensuring long-term success in trading. Regularly reviewing your
performance and updating your plan will help you stay agile and responsive to changes in the
market.

Stay committed to the process

Upholding discipline and adhering to your personalized process is crucial for successful
trading. Concentrate on the best setups and manage your risk-reward ratios diligently.
Continuously evaluate your trading performance and learn from both your wins and losses.
Committing to your process means resisting the urge to make impulsive decisions based on
emotions or external factors, such as news, social media, or others' opinions. Developing a
strong foundation of discipline will not only contribute to your trading success but also
enhance your overall decision-making process.

Write Your Own Plan

PAGE 18
Your Mind, the Ultimate
Trading Tool
In this section, we will delve into the crucial topic of trading psychology. It is often said that
trading is 5% skill and 95% psychology, emphasizing the importance of mastering your
mindset when engaging in the markets. Even if you possess the most effective strategy in the
world, you'll ultimately fail if you can't get your mind right.

The key to success lies in trading like a robot—cold, emotionless, and adhering to a predefined
set of rules—rather than an emotional human being whose judgment can be clouded by
fluctuating emotional states. Let's explore the various aspects of trading psychology and learn
how to develop the mental fortitude necessary for success in the world of trading.

Major Pitfalls and How to Overcome Them

As you experience growth in your account size by focusing on the process, psychology, and
consistency, it's important to reevaluate your trading strategy and make necessary
adjustments. These adjustments might involve modifying your risk per trade, diversifying your
portfolio, or exploring new trading instruments. It is crucial to have a contingency strategy in
order to preserve the progress you've made. Periodically assessing your performance and
refining your approach will help you to adapt as the market evolves.

PAGE 19
 Frustration

Revenge FOMO

Fear Inconsistency

Frustration: Frustration can feel like an unwelcome party guest that just won't leave. It often
arises from not knowing what you're doing and setting unrealistic expectations. To overcome
frustration, absorb knowledge and develop a solid trading strategy.

Inconsistency: New traders tend to switch between strategies like kids in a candy store, not
giving any one strategy enough time to prove its worth. Commit to a trading strategy long
enough to evaluate its success rate over a substantial number of trades.

Fear of Missing Out (FOMO): FOMO can lead traders to chase stocks impulsively, like dogs
after squirrels. Trust your trading system and avoid being swayed by external factors such as
news, social media, or other people's opinions. Trading is not like Pokémon… you don’t need to
catch them all. There will ALWAYS be another trade.

Revenge Trading: Revenge trading occurs when traders attempt to recover losses quickly by
taking on even riskier trades. To prevent this, stick to your trading plan, accept losses as a
natural part of the process, and maintain a disciplined approach.

Excessive Fear: Excessive fear, often resulting from risking too much, can cause sleepless
nights and anxiety. As Jesse Livermore once said, "If you can't sleep at night because of your
stock market position, then you have gone too far." If this is the case, reduce your risk
exposure to a more comfortable level.

PAGE 20
Setting Proper Expectations

As you embark on your journey to becoming a successful trader or investor, it's important to
recognize that it takes time, patience, and a lot of trial and error. Trading and investing are not
get-rich-quick schemes, and attempting to take shortcuts will only lead you to a dead-end. With
that in mind, let's discuss how to set proper expectations for your trading and investing
journey.

Be prepared for losses: Understand that you will inevitably lose money on some trades. It’s
impossible not to, and it’s part of the learning process. Accepting this as part of the trading
journey will allow you to focus on finding a statistical edge and exploiting it over the long run.
Consider any money you spend losing in the stock market as market tuition paid to Professor
Market from the Stock Market University.

Practice patience: Successful traders exhibit patience, like a lion waiting for the perfect
moment to attack its prey. Avoid the urge to chase every opportunity, and instead concentrate
on quality trades that align with your strategy. This mindset will serve you well as you navigate
the world of trading and investing.

Discipline and Mindset Management

Becoming a successful trader/investor takes time, patience, and a lot of trial and error. It's
essential to understand that there are no shortcuts to success, and you must be willing to
put in the effort to achieve your goals. Embrace the learning process, and remember that
trading and investing require dedication, persistence, and the right mindset. In this section,
we'll cover some key aspects of trading psychology and the importance of developing a
detailed trading plan.

PAGE 21
Importance of discipline

Discipline is the backbone of consistent success in

trading. A disciplined trader with a decent plan will
outperform an undisciplined trader with the best
plan.

Mindset management

After acquiring the necessary knowledge and

technical skills, the battle for success in trading is
primarily about managing your mindset. Make sure
you're in the right mental state before trading and
avoid trading when you're emotionally
compromised, sick, or sleep-deprived.

Consistency and risk management

Successful traders focus on consistency and risk

management. Develop a detailed plan that
addresses these aspects to set yourself up for long-
term success, and you'll be on your way to financial
growth.

Developing a Detailed Trading Plan

Creating a comprehensive trading plan is crucial for

success. Your plan should define the setups you'll
trade, how you'll find them, how you'll manage risk,
when you'll take profits, and how you'll track your
results. Make sure your plan is repeatable and allows
for consistent decision-making. We cover this in
more depth in Stock Dads Academy.

PAGE 22
 Practical Trading
Psychology Tips
Getting Comfortable with Mental Conditioning Techniques

Visualization and mental rehearsal

Imagine yourself making successful trades, which can boost

your confidence and help you feel more prepared for real
trading situations.

Practice mentally going through different market scenarios and

your planned reactions, helping you stay composed and
focused when facing similar situations.

Mindfulness and meditation

Incorporate mindfulness into your trading routine to maintain

focus, remain calm under pressure, and make clear-headed
decisions.

Regular meditation can help manage emotions, reduce stress,

and increase mental clarity, all of which are essential for
successful trading.

Positive self-talk and affirmations

Support and motivate yourself with positive self-talk, which can

improve your confidence and belief in your trading abilities.

Use affirmations to reinforce your trading goals, aspirations,

and commitment to your strategy, helping you stay on track
and maintain a positive mindset.

PAGE 23
 Practical Trading
Psychology Tips
Rolling with the Punches: Resilience and Persistence in Trading

Embrace learning opportunities

View mistakes as valuable learning experiences and use them

to refine your trading strategy and approach.

Continuously seek to grow and improve your trading skills by

learning from your own experiences, as well as from other
traders and educational resources.

Set realistic goals and achieve them

Create attainable goals that align with your abilities, resources,

and trading strategy, setting yourself up for success.

Break down larger objectives into smaller, manageable steps,

making it easier to track progress and stay motivated.

Safeguard your finances with a solid risk management

strategy

Develop a comprehensive plan that outlines how to protect

your money and manage risk while trading.

Strictly follow your risk management rules and practice

resilience, ensuring long-term trading success and stability.

PAGE 24
 Practical Trading
Psychology Tips
Your Trading Tribe: The Importance of a Strong Support Network

Connect with fellow traders

Participate in forums, groups, and social media platforms to

stay informed about market trends, news, and strategies. We
are obviously partial to the Stock Dads Discord community.

Engage with other traders in your community to exchange

knowledge, experiences, and advice, which can enhance your
learning and growth.

Seek mentorship and enhance your skills

Find an experienced mentor who can offer guidance, support,

and insights to help you navigate the complexities of trading.

Invest time and money in educational resources and training to

further develop your trading skills and expertise.

Maintain a healthy work-life balance

Prioritize relaxation and self-care to prevent burnout, ensuring

you can bring your best self to your trading activities.

Engage in hobbies and activities outside of trading to maintain a

balanced and well-rounded lifestyle, ultimately supporting your
mental well-being and overall success.

PAGE 25
Before we delve into the specifics of growing your small account, let's briefly revisit the key
concepts we touched upon earlier. Keep in mind the vital aspects such as risk management,
choosing the best setups, and staying disciplined with your trading plan. By adhering to these
fundamental principles, you'll be better prepared to enhance your account's growth.

Essential Tips for Accelerating Your Account Growth

Risk 1-5% per trade: By risking 5% or less of your account per trade, you can withstand a few
losses without significant damage to your capital. This approach allows for quick growth while
keeping risk manageable.

Aim for a 2:1 risk-reward ratio or better: Focus on trades that offer at least double the
potential reward compared to the risk involved. This ensures that even if you lose some trades,
your winning trades will more than make up for the losses.

Be selective with your trades: Just like choosing your favorite pizza toppings, opt only for the
best setups that align with your trading strategy. This careful selection can lead to a 75-80%
win rate, which will help your account grow at a faster pace.

Maintain discipline: Commit to trades that meet your risk-reward criteria, even if it means
passing on some seemingly attractive stock plays. Remember, patience is key in successful
trading.

Withdraw your profits: Withdraw your trading profits to avoid overtrading, protect your gains,
and resist the temptation to gamble. Instead of focusing on growing your trading account,
focus on growing your net worth. Investing these profits for the long term will develop a well-
rounded strategy that will compound exponentially over time.

Constantly review and refine your strategy: Assess your trading performance regularly and
adjust your plan as needed. A flexible and adaptive approach allows you to capitalize on
changing market conditions and improve your overall success.

PAGE 26
Throughout this guide, we have covered several crucial aspects of trading that are essential for
your success in the stock market. As you continue your trading journey, always remember the
key points discussed in the following primary sections:

Risk Management 101: Focus on position sizing, diversification, risk-reward

1 ratios, and using a risk of ruin calculator to manage risk effectively. Maintain
separate accounts for trading and investing, and make sure to utilize stop losses
to protect your capital.

Execution of Trades: Learn to use OCO/bracket orders to improve your trade

2 execution and minimize emotional involvement. Develop a personalized trading
plan to help you stay disciplined and consistent in your approach.

Trading Psychology: Be aware of the major pitfalls in trading and learn how to
3 avoid them. Set proper expectations, maintain discipline, and continuously work
on improving your trading mindset. Make use of practical trading psychology tips
to enhance your mental resilience and performance in the market.

Turning Your Small Account into a Big Account: Implement essential tips for
4 accelerating your account growth, such as staying disciplined, choosing the best
setups, and managing risk effectively. Focus on long-term success and
continuously refine your trading strategy as you progress.

Achieving success in trading is all about identifying your edge and leveraging it over time. Stay
focused, maintain your discipline, and never stop learning. By following this comprehensive
guide and putting in the effort, you'll be well on your way to a thriving trading career. And
remember, just like a dad joke, timing is everything!

Why was the stock trader always

calm and collected? Because he had
a lot of stock options!

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 COPYRIGHT
Copyright © [2023] [Stock Dads LLC]

All rights reserved. No portion of this book may be reproduced in any

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U.S. copyright law. For permissions contact: [[email protected]]
 The
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