Have you ever wondered what it’s like to be a Forex trader? Do you want to know how much money you need to start Forex trading? This article will cover what you need to begin a successful Forex trading career.
Begin by looking at your starting capital. This will most likely determine your returns in Forex trading. Another factor to consider is which type of trader you want to be. Is it a day trader or swing trader? This will determine the amount you need to start this journey.
Let’s take a closer look.
How Much Do You Need to Start Forex Trading?
Even though it’s easy to start Forex trading as the Forex market is one of the largest and most accessible financial markets, a lot of skill and patience is needed to be a successful trader.
When you start trading, you want to test your strategies, allowing you to pivot, scale your trades, and create a continuous cash flow.
Looking at the minimum amount needed to trade Forex, always remember which trading style you chose, the minimum deposit required by your broker, your experience level, and how much funds you have available.
Traders can open accounts with a relatively small deposit, depending on with account services they go for.
Is $100 Enough to Start Trading?
This is doable, but you will be limited unless you trade dangerously (not recommended). Your yield will also be very restricted.
Let’s say you were to get a 5% return on a single $100 trade, and it will only result in a $5 gain. This might encourage you to trade riskier for more significant returns. A better approach would be to increase your deposit size once you feel comfortable doing so.
Manage Your Opening Capital
It’s important to understand how you will manage your opening capital. Here we have complied the most important lessons to remember:
Trades Should Never Exceed 1% of Your Opening Capital
When starting, we recommend you don’t risk more than 1% of your total capital on any one trade. For instance, if your account has $5000, don’t place trades bigger than $50. This will help minimize your risk and help you learn the trade without draining your account.
Influence of Opening Balance on Trading Costs
Breaking even should be one of your first goals when you start trading. As trading carries costs, you will feel the need to make larger riskier trades. Therefore, it’s essential to stick to your long-term goals to mitigate this.
If your goal is to trade full-time, give yourself 6-9 years of honing your trading skills.
How Many Hours Should I Dedicate To Make Money?
Some full-time traders constantly trade throughout the day. Other traders prefer to trade only at specific hours of the day. Your hours will depend on the type of trader you are.
Day trading can be exhausting, but this doesn’t mean you have to be glued to your screen for hours. You can choose which times fit in well with your strategy. Don’t forget to make time for breaks and some downtime. This will help you stay on your toes and concentrate better.
To learn more on when the best time to trade in the most important sessions (New York, London, and Tokyo), take a look at this timetable.
Your expectations should always be realistic when you start Forex trading. Realize your starting capital’s influence on your success and plan accordingly.
When looking at what separates professional traders from novices, the number one factor is a trader’s ability to put more capital to work and replicate profitable trades.