Trading with small amount is effective, when your profit expectation is low. With small amount profits will be low, so need to learn with small amount and gradually need to increase the trading value. This helps get good profit than simply going for big amounts and ending in loss.
nowadays i prefer trading with large amount and most of the time 0.5-2% are more than enough
when i traded with small amounts the 0.5-2% tactic would not worth much