Tips and Advice How Much Money Do You Need to Start Forex Trading?
One of the most asked question about forex is how much money is actually needed to start trading. Among generous number of advices the amount needed varies shamelessly anywhere from $1 to $50,000. What is the true number needed to start up a forex account? Should the amount invested depend on quantity of education perceived?
The beginners in forex trading should not invest any amount at all before they test drive their trading plan and strategy with free demo account. Until you have a decent strategy which works on demo account over a long period of time, you should not invest the real money. You are ready for real account as soon as your demo trading with virtual money brings profits for several months in a row.
Keep in mind that even demo trading can be very challenging. Greed and desire for quick money are the deadly sins and it takes time, experience and a lot of emotional challenges to leave these sins behind. My advice is to keep your money safe until you really know what forex is all about and your strategy is revised, tested and proven to work consistently with minimum losses. Do not use your real money for several months or you will most likely lose it. Experience is the tick and you will figure out how much money to invest according to the strategy you use.
Traders who have completed the demo “probation” period and still ask how much is needed to start trading for real should probably consider their cost of living. If the money situation is tight, forex trading needs great caution.
Forex requires a lot of patience. Don’t try to earn 100% profit per day – this is very unlikely. Follow your trading plan of making 100% in, let’s say, six months. Believe me, those who try to get rich fast ultimately lose all of their funds.
All that said, I suggest after demo trading to start with a micro account with about $50-$100 in it. See if you can manage to use the same system trading 1 cent per pip and make profits for couple of months.
It is all up to your individual circumstances, experience and personality. Never invest more than you can’t afford to lose. It should be the sum you can survive without. It definitely shouldn’t be your monthly salary or your kid’s college tuition fees! The optimal amount is how much you life (this is not a misspelling, I didn’t mean wife here… although wife plays a big role in decision too!) allows you to lose.
If you survive the micro account and you develop enough confidence it is time to move on to standard forex account with 0.1 lots trades or $1 per pip with the initial funds of $1,000.
Overall, keep reading and learning. If your forex system makes you money then congratulations! You are officially a professional forex trader!
