The million dollar question in forex trading - How much should I start with in forex trading. Technically you can start with as little $5 USD. Yes you heard it right & no limit to upside. But with $5 USD do not expect some fireworks. There is no one straight answer to what's the ideal amount to invest in forex trading. It depends on quite a few factors which we will be getting into right away.
The first factor to consider is this, how much money are you willing to lose. if its $10, $1000 or more. Whatever that amount is is the amount you should consider investing. Second thing is understanding that the higher amount you have in your trading account, the lesser is the risk and there is higher possibility of making gradual returns on your account provided you trade sanely.
Let me explain to you how this works. Lets say you are aiming to make a $100 per week. Now if you invest just a $100, you are aiming to make 100% return per week which can end up in high risk trading.
But if you start with $1000 & aim to make $100 per week, that is still a much lower risk as now you are aiming to make just a 10% of the account. Thirdly, enough money on your account allows you to keep your trades running for longer in case you are on a wrong position, this way you can actually wait for the trades to come back into your favor. These are the important pointers to consider while thinking about how much to invest in trading.
Trading is a business, not a casino. As a trader, you are a businessman, not a gambler.
I have different way to find the right answer for such question ... I believe that to start trading, a good start of 10% of your total capital that you can lose in the worst case. May be max 15%. You shouldn't think about how much you want to earn at the end of the month because this will lead you to either to increase the trading risk or the start up investment to achieve your goal. By time, you will increase your capital in steps. Once you achieve your monthly target, then you can start withdrawals. The less withdrawal with lowering your risk is the best for your long term investment.
Important point that most of traders neglect, it's the trader psychology and his self control in trading. Once you overcome on this, mostly, there will be no limit for your success.
I agree... It is not always the question of 'how much should I invest' since there is no way your capital is big enough to influence the market price ( if not you will not be talking with us in this forum)... it is always the question of 'How much am I willing to lose'... The most important thing is you have to control the leverage and the margin. Play safe with good SL and TP..
I believe that people have to start from any sum of money actually. There is no difference, if you want to start from 100$, then you can start from this sum, remember that you should check the conditions on depositing from your broker. If you have 1000$ and moremoney, then you can also start from it. The logic is pretty easy, the more money you invest, the more potential income you acquire. Moreover, there are some other factors which affect your potential income, remember that you also are able to lose all this money, be ready for this and never give up, because once you give up you get nothing but negative emotions and stress.
This is some really good advice. I wish i had someone like you during my novice forex years , i would have surely made some good amount during the initial phase of the forex trading career. But i would like to ask what if that trader cannot afford $1000, would you suggest they leverage it?
Completely up to you based on two things-one how much you can afford to lose and two your risk appetite starting off. You need to be able to sit comfortably in drawdown without getting nervous or closing your position early
There is no limit to how much you can trade with other than your broker’s requirements. But yes, you must always start small when you are going live. You can choose an amount that you find suitable for trading as per the risk you wish to take.
You must always invest what you are comfortable risking because there is no limit to how much it should be. If your broker allows, you can trade with as low as $5 because the beginning of your trading career would be full of mistakes and losses that you must take lessons from.
In short what you can afford to lose but with that comes the stipulation that the amount you can afford to lose allows you to trade with proper risk management with the smallest lot size you can use (so 0.01 on standard accounts). If you are not able to do this then keep your powder dry and stay on demo until you can.
If you can't spot the liquidity then you are the liquidity.
HIGH RISK WARNING: Foreign exchange trading carries a high level of risk that may not be suitable for all investors.
Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
You could lose some or all of your initial investment. Do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions.
Any data and information is provided 'as is' solely for informational purposes, and is not intended for trading purposes or advice.
Past performance is not indicative of future results.