Originally Posted by
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Of course it is not possible to earn a living from a inadequately funded account, especially as living expenses create an extra kind of drawdown. The smaller the account, the smaller any gains created, relative to these costs.
However, that doesn't alter the reality that FX trading is totally scalable, i.e. 10 percent is 10%, irrespective of whether one is trading micro-lots, or 100 lot positions; and that gains may be compounded exponentially using adjusted fractional sizing (or anything similar).
Thus, whether an account becomes blown or not has nothing to do with its size. If newbies blow accounts since they're attempting to get rich too quick, then that is an MM issue, i.e. sizing places too high percentage-wise, with regard to total capital. If I trade 100 lot places with an account size of $500,000, then I'm just as inclined to blow my account for a man who is trading minis with an account size of $500, since the percentages are the same. (In fact possibly more so, if I'm not able to cope with the plogical pressure imposed by the higher stakes.)
Beginning with a large enough account equilibrium offers no guarantee of success. Success is dependent on getting all of money, process and mind sorted out, whatever the degree of bets. Hence I believe that the impliion in the initial article - that method things less than starting capital - is completely misleading.
To be honest though, if inferior MM is more widespread among people trading small size accounts, and brokers are preying on this simple fact, then the idea has some merit.
Finally, to whatever extent brokers earn money by trading from their customers, then surely - everything else being equal - there is more in it for them by focusing on the big fish trading their 10 lot positions, than the minnows that are trading micro-lots.
David