Growing a small account isn't easy. There is little to no room for error and the amount of positions that can be held is limited. But it isn't impossible! With the right rules, discipline, and planning you can grow a small account above PDT (pattern day trading) limitations in just a few weeks.

In this guide, you will:

- Define your trading goals
- Learn the benefits/cons of options/equity trading strategies
- Why you should consider a cash account
- Developing rules and discipline

Limitations in buying power put small accounts at a disadvantage over large accounts. Traders should consider the two trade type strategies below to see what makes the most sense for your trading style, trading goals, and other factors.

For Equity Focused Accounts:

Focus on the base hits! Only take trades that provide a significant skew (from a risk/reward) perspective in your favor, and also have a ton of range to the upside for going long, or a ton of downside for going short. Additionally, allow your trades to continue to work - this cannot be stressed enough. If a position that you enter is working, there's a higher probability that it continues to work. Stay in the situation until the situation changes from a technical perspective. Don't exit working trades to enter a new trade!

It's also important to go with a broker that meets your trading style. For those who like to short, take the time to research broker borrow fees. Most brokers nowadays offer commission-free trading for going long.

For small accounts, swinging overnight presents a ton of risk. Unless the position is completely paid for, don't even consider holding a position overnight. Exit the position at the end of the day - there are so many runners every single day, new opportunities to make money arise. There's no reason to not walk away with profits. Take the money and run.

For Options Focused Accounts:

Reiterating the focus on base hits! The 25-50% moves are the trades that will grow the account. Focus on lower beta names for day trading, and lower beta, lower theta names for swing trading. Stay away from high volatility - these can and will shake you out of positions and destroy your small account. Depending on your buying power, focus on contracts that are relatively inexpensive so that it's possible to buy more than one or two contracts - unless there's an extremely high quality setup.

Clear, multi-day momentum moves should be followed with appropriate rolling rules. Take the profits from one strike and roll some into a higher strike until it doesn't work, with smaller size on each roll. This way, no matter what, you will walk away with profit.

Keep in mind that brokers charge option fees on a per contract basis - avoid overtrading by limiting the amount of positions taken in a day. As the account grows, consider negotiating with the broker to lower your commission by a few cents.

Like equity accounts, swinging overnight presents a ton of risk. Unless the position is completely paid for, don't even consider holding a position overnight. Exit the position at the end of the day - there are so many runners every single day, new opportunities to make money arise. There's no reason to not walk away with profits. Take the money and run.

In trading, the existence of the PDT rule makes it difficult as a small guy to grow because you're limited in the amount of day trades you can make. With a margin account under $25,000, you are limited to three day trades per week. To get around this, several brokers offer what are called cash accounts.

So, what is a cash account? It's an account type that allows a trader to make unlimited day trades per week, with one caveat: you can only use the buying power equal to your account value. Let's say your account is currently at $3,000. You could take $500 positions on six different trades ($500 x 6 = $3,000). Once your buying power is used for the day, you have to wait for the trade to settle in order to use that cash again. Typically for options, there's a T+1 settlement time, and for equity it's T+2. So, if you took an equity trade for $500 on Tuesday and also sold it on Tuesday, that $500 won't be available again until Thursday. 

Because cash accounts allow for unlimited day trades, this is the recommended path for small accounts to pursue.

As a small account, concrete rules must be implemented and followed! There's no forgiveness in the trading environment. All it takes is a small deviation from discipline to cause significant damage to your account.

Here are a few rules to consider:
- amount of trades taken per day
- how many bad trades per day
- trading specific setups
- psychology
- scaling in/out
- momentum rolling

With all of these steps developed and implemented, you are ready to step into the market and apply it - remember that as a small account your margin for error is very low, and to always stick to the rules!

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