How much trading capital do you need for forex trading?

The minimum amount to start trading forex depends on which type of trader you plan to be.

How much can you afford ? and How much do you expect to make after a certain period of time?

Some brokers even offer minimum deposit of $1. But of course, there isn’t much you can do with that.

So, amount of money you need to trade Forex varies depending on different individual capacity.

It involves Forex education costs,  buying the trading gadgets such as computers, internet costs and the trading  capital account.

If you are just a beginner, It’s better to start trading with small amount on a real account to test your trading  emotions with real money.

When you feel comfortable with yourself you can deposit a bigger amount and trade it with discipline and good risk management.

Some Forex brokers allow deposits as low as $30 accounts and this gives traders more chances to trade.

smaller Capital amount to start trading forex

Trading an  account as small as $30 requires a lot of discipline and patience.

If your motive is to turn it into a million dollar within a shortest time possible, I may say it’s unrealistic.

Trading small accounts may cause over trading due to desire to develop your account. This may result to to many small losses.

This means you only trade on smaller time frames and take trades for a short time.

But if you maintain good risk management, a small account is a great opportunity to grow your skills for starters.

If your skills are good enough, you should start as small as $ 500 and use your first profits to develop the account.

However, If you still can’t afford that, do a smaller one as you continue to save until you get some reasonable amount to trade. This is also just enough to do daily trading.

How much do you need to take long term trades

  Long term trades last for a month to several months or sometimes longer.

You will need enough money to keep you in a trade or trades for that long.

Long term trading/position trading, require larger Stop Loss levels which is hard to maintain with a small trading account.

It also requires you to have margin enough to avoid margin calls and maintain free margin.

In case you plan to do long term trading, You certainly need to start with a bigger trading capital.

I recommend starting with at least $4,000 in capital. This is because you need to plan for the larger price moves with your stop loss.

Secondary price volatility changes all the time.

Also a lot of economic events that may influence price movement occur more often since you stay in trades for long.

Otherwise, a good starting account to start with trade should vary from $500 to $10,000. This depends on the type of trader you want to be and your trading goals.

The fact is, no matter how big the account maybe, if you don’t trade it with consistent discipline and good risk management, you can still blow it just in a single trade.

Conclusion on the Amount to start Trading Forex

How much you want to make from Forex trading gives you a basis of what amount to start trading forex you need as your startup capital to trade.

So you can start with either small amount or big depending on how much you can afford.

Like we said in the previous lesson, Forex capital is only that you can afford to lose and your well-being stays the same.

So a lot of factors have to be considered as you determine how much you need to start trading.  

These may include; the expected return, your risk appetite, and your trading strategy.

Therefore, to determine the amount to start trading with, can differ from one person to another.

Forex trading is a very high risk venture that operates on probability basis.  You either win or lose.

Only the risk management rules can help you to increase the chances of winning to your side at the same time protect you from large losses.

Learn to accept when you are wrong, let go of bad trades, and follow your trading plan.

Lastly, Don’t invest that money unless you are fully prepared to lose it.  Never risk more than you can afford to lose.