Initial investment as the constant money flow that will support your trading career is extremely important in forex trading. One of the first questions potential forex traders ask them self is what is the minimum amount to start forex trading? Many forex traders earn good returns on their investments. Yet, in order to start trading forex in the first place, you do actually need to have a certain amount of money. Regardless of whether you are only thinking about going into forex trading or have already started with your demo account, there is still a question on your mind – how much money do I need to start trading forex?
Not everyone is going to have the same amount of money to start with. The amount of money you have – the size of your trading capital – will determine the position size that you are able to trade with. The position size is essentially the amount of money you put into the market – in other words, the amount that you trade. The larger the position size, the more money you will make if the trade wins. However, this also means you can lose more money. This is why using the correct position size is so important because you can keep within the correct limits of money management and protect your capital from losing trades.
As a beginner, you are going to make a lot of mistakes and you are learning at the same time. So, starting your trading career with a large fund is not a good idea. This is because the lessons you will learn in the early stages of your forex career in relation to setting up trades, entering, closing and profiting or losing are not dictated by your starting balance. You can simply trade smaller lots and still have the same educational outcome whatever the end result. Most forex traders lose a few accounts at their early stage, and that is very natural. You will learn to respect the market and learn to be disciplined in a hard way. But you should also preserve your capital for the future when you are going to be more mature as a forex trader.
If you are ready to trade using the real account and make real money, you should know that the amount of money you need to start trading depends on the account type you choose. For example, to trade on the micro account you will need to deposit at least $100. You will be able to open orders the volume of which starts from 0.01 lots and use decent leverage. If you plan to open many trades, consider a standard account with a 0.5-pip floating spread. This type of account requires a minimal investment of $1000.
The minimum amount needed to trade forex depends on a variety of factors, such as your trading style, available funds, average Stop Loss level, the required minimum deposit for your broker, level of experience, and so on. In any case, you should never invest more than you’re comfortable losing. Trading financial markets involve a high risk of losing your funds, and you don’t want to invest your entire life savings into trading. Finally, the experience is also a crucial factor that influences the size of your starting capital. If you’re a beginner, you could start with as low as $100 to get a feeling for the market when trading with real money. On the other hand, if you’re consistently profitable and have years of trading experience, you can afford to invest as much as you’re comfortable with.
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