Forex Position Trading with a Small Account - Week 21 | Technical Analysis by Jasper Lawler

Weekly Thoughts

Can You Position Trade with a Small Account？

Position trading in forex means holding trades for weeks. Many believe it‘s only possible with a big account—but that’s not entirely true.

Lets address the common idea:

“I have to day trade because I only have a small account.”

Yes, larger accounts give you more flexibility. But in forex, micro lots make it possible to position trade—even with limited funds.

The style of trading you choose should match your personality and schedule, not just your account size.

Position Trading Example

A position trader sets wider stops to withstand the normal weekly noise. One helpful tool here is the Average True Range (ATR).

On May 21:

• EUR/USD 14-day ATR: 104 pips

• EUR/USD 14-week ATR: 217 pips

This shows how much the pair typically moves, helping determine realistic stop loss and profit targets.

The weekly ATR for EUR/USD is around 217 pips. But lets be real—nobody consistently buys the exact bottom and sells the top. That figure simply shows the total movement available in a typical week. In practice, position traders aim to capture a portion of that—often 60–70%—which is more realistic and still meaningful.

Say you aim to capture 60–70% of the weekly range. Thats around 130–150 pips per week. A 200-pip profit could take 2 weeks or more, depending on market conditions.

How Long Would It Take to Reach a Target？

What Does a ‘Position Trade’ Look Like？

Trade Setup Summary (EUR/USD):

• Weekly ATR: ~217 pips

• Expected directional move: ~130 pips/week (realistically capturing ~60% of total range)

Stop Loss: 100–150 pips

• Wide enough for normal pullbacks

• Limits exposure if trade fails

Profit Target: 300+ pips

• 2–3x stop loss in line with solid risk-reward

• Reachable in 2–4 weeks if trend holds and volatility stays elevated

Position Sizing with Small Accounts

Lets calculate position sizes for a position trade on EUR/USD using:

• A stop loss of 130 pips

• A risk-per-trade of 2%

• Account sizes: $500, $1,000, and $2,000

As we all know, a standard contract is worth around $100K (depending on the forex pair). A mini lot is $10,000 and a micro lot is $1000.

Position Size Calculations

Note: In MT4, a micro lot is shown as “0.01”.

So actually, if you are limiting your risk to 2% per trade it is not possible to position trade with a $500 account. However, with a $1000 account, you can trade 0.015 lots in MT4 and risk $20 (2% of your equity).

With a $2000 account you can trade 0.30 lots, which is even better because you also have the option of scaling in and out of a position with 3 separate orders of 0.1 lot at a time.

I know what you‘re thinking. I don’t want to wait 3-4 weeks to make $40!

Thats not the point, if you can make $40 - you can logically make $400 (10X) or $4000 (100X) with larger positions once you have access to a larger account.

If the math feels confusing, reread it. Its worth understanding.

Setups & Signals This Week

GBP/USD

• Setup: A failed double top and breakout to multi-year highs keep us bullish above 1.34.

• Signal: Cleared 2024 peak and 1.35. USD weakness across majors supports the move.

AUD/USD

• Setup: Aussie cleared prior resistance at 1.63–1.64 with its best weekly close of the year.

• Signal: Broke a triangle pattern. Early entry possible at the trendline, but full confirmation needs break above May highs.

Silver (XAG/USD)

• Setup: Price held above 30-week moving average and posted a multi-week high.

• Signal: A move above 33.70 gives early entry; 35 remains a key breakout point. Broken trendline may offer support.