Module 17: Scaling Your Account

Scaling a trading account is a marathon, not a sprint. Compounding small, consistent gains is how professional traders build wealth.

The Power of Compounding

If you make just 0.5% per trading day (after losses) with a $10,000 account, compounding over ~250 trading days in a year:

• Month 1: ~$10,000 → ~$11,050
• Month 6: ~$16,500
• Month 12: ~$27,000+

Even modest daily returns compound explosively over time. The key is consistency and capital preservation.

Graduated Position Sizing

As your account and skill grow, gradually increase position size:[^48]

Stage 1 – Learning (Months 1-6): Risk 0.5-1% per trade. Focus on process, not profit. Goal: consistent execution of your rules.

Stage 2 – Developing (Months 6-12): If consistently profitable, increase to 1-1.5% risk. Introduce a second strategy or additional instruments.

Stage 3 – Proficient (Year 1+): Risk up to 2% on your highest-conviction setups. Scale down to 1% on lower-conviction setups. Begin pressing winners (adding to winning positions at pullbacks).[^48]

When to Go Live

Transition from paper trading to live trading only when:[^8]

1. You have a positive expectancy over at least 100 backtested trades.
2. You have been paper trading profitably for at least 1-3 months.
3. You can follow your rules consistently without emotional deviation.
4. You have defined your risk parameters and trading plan in writing.
5. You are using money you can afford to lose.

Protecting Your Capital

• Never risk money you need for living expenses.
• Start with the smallest position size your broker allows.
• Increase size only after proving consistent profitability at the current level.
• If you experience a drawdown of 10%+, reduce position size until you recover.[^29]