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Initial Capital for Forex

Discussion in 'Beginners Forum' started by lety, May 17, 2013.

  1. lety

    lety

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    One of the most common questions of beginners in the forex market is how much money is needed to start making forex trading ... There is no universal answer and I'll explain why.

    The forex brokers allow you to trade standard lots and mini lots. The margin of a standard lot (depending on the pair you are trading) is about $ 1000 USD and the margin of a mini lot is $ 100 USD.

    Technically could open an account with $ 500 USD to do with trading 5 mini lots. Of course you would be violating the rules for managing risk and losses can be accentuated. The key to success in forex arricar is not more than 5% of the size of your account on a trade, if you were to trade 1 mini lot risking and losing 50 pips, would be about $ 50 USD risk in this trade.

    Many experts even recommend a maximum risk of 2% per trade, but it is impossible for those who start with little money.

    This means you would need an account of at least $ 1,000 with a 5% risk per trade ($ 1,000 x 5% = $ 50) or $ 2,500 for a risk 2% per trade ($ 2,500 x 2% = $ 50). A risk of 50 pips can be a bit exaggerated but it is important to have a good off early.

    When I started doing created a forex trading account with 500 € which at the time gave about $ 800 USD. At the time had also read about risk management but simply had no more money available. What you need to bear in mind is that when we started trading everything is more complicated because it is a new experience. When you enter an order for the first time had the heart to palpitate and not take my eyes of the screen of 2 hours.

    Friends of mine have had success with initial deposits 100 € and 250 € but it will not happen to everyone. With the popularity of forex there are more people playing it. When I say play, even if this is the term I would use. Many people who start in forex with a deposit of $ 100 or $ 200 cash deal look like they're in a poker game online or in a bookmaker. One of two things is lucky and win a few euros and then lose it all or lose it all soon at first.

    The forex is not a bookmaker or an online poker game and despite being very easy to earn money with it, you must know what you do and not go throwing mud against the wall and see what sticks. That said open a forex account with a small amount to 100 € is always a good way to learn the rules of the market. Training with real money is an advantage to be small despite the return to these values.
     
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  3. UMOFX IB

    UMOFX IB

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    Initial capital for traders is up to their affordability . Now brokers facilitate traders by offering low deposits. As UMOPX is giving opportunity to invest $1 as start in micro accounts. I like micro accounts for real practice. I think $25 to $100 should be a starting amount for a trader so that he can easily trade in market. In standard accounts he should invest more than $500.
     
  4. riddick09

    riddick09

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    Yes, it will also possible to depend on their funds that they can afford to lose not only what they can accumulate capital. For now, I would say that it's recommended to have 100 dollars as for novice traders. In this way they can have survive in the market volatility as they can set the account with more free margin.
     
  5. Markllee30

    Markllee30

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    Yes i also agree with you initially every new trader must invest with small capital because their is risk of loosing money their in forex due lack of knowledge.
     
  6. riddick09

    riddick09

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    It's not a must to invest small capital but will depends on our goal in Forex the target profits and our risks we want to take. Well, a good trader will going to know that if they don't have invest huge investments they can't easily have huge profits and they also accept of the huge risks.
     
  7. indieover

    indieover

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    We slips not focus too much on the capital. We should start with whatever amount we can afford and can afford to lose although I'm not saying you have to lose it. But in forex trading it is allowed to use a small amount now. For a start we altos not be in a hurry to make so many profits right away.
     
  8. FxGuy

    FxGuy

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    Some brokers also offer cent accounts and you can start trading with like $50 and can learn great money management. I think it's too risky to trade on standard accounts with balances like $50 because a few losing trades and you wipe up your account
     
  9. riddick09

    riddick09

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    I think that cent accounts and other type of trading accounts has offered by every broker nowadays to have given good choices. But I think that in having cent account to trade will not for me a good start to make a decent profits in Forex because, it will be really small profits target though has low risks.
     
  10. hadg33

    hadg33

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    Exactly,that mini account or cent account would not make a trader to earn well in forex. Although we are to invest the little that we can afford to loose in forex but me as a forex beginner would not like to start with $50 cos I won't make good profits from it.
     
  11. riddick09

    riddick09

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    Yes, I suggest to have 50-100 dollars as initial investments. This can be good for both of the strategy long or short term. And yet, there are many leverage we can choose from to have these amount and the longevity of our trading account. Also, that we should have applied a good risk management for the capital.
     
  12. ryuken

    ryuken

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    I think 50 bucks is low and in order to see some good returns it is better to invest into 100 or more. Most of the online mentors these daysa re suggesting the 500 bucks amount. I know that not all people can afford that high amount so sure we can instead consider 100 or 200 USD amount which is also there as well.
     
  13. riddick09

    riddick09

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    Yes, it can be low. And yes, I wanted to have also 100 dollars but it will take some time to accumulate this amount because, we know that it ain't easy to have money. Good thing we have other means here of having capital and also bonus to trade and that we will not have risks from losing our money.
     
  14. sindarin

    sindarin

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    The standard amount is $100, but i prefer $200 so i can registered in regulated brokers, usually regulated brokers has high minimum deposit even reach $500 for one deposit. but there are so many unregulated brokers which offering even up to $1 as minimum deposit.
     
  15. ryuken

    ryuken

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    Well if you are from asia, then you know that most of the forum posters can't get 100 bucks or more in short time or not even on daily basis. if they were to be getting that much amount they could have invested into something else. that is what i have noticed in such forums.
     
  16. sindarin

    sindarin

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    yeah i really aware of that fact, most traders cannot afford that much. but i still think that is the ideal amount for traders to start, and if they can maintaining their performance i am sure they will gain a lot of profit later, and even will make 200% profit from their capitals.
     
  17. riddick09

    riddick09

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    I would say that traders will going to have the chance to trade in Forex but then, they can't easily think of having 200% because, that's not going to be quick or fast to achieve but then, it's possible in the decent capital. But having small amount of capital that's not easy.
     
  18. budado

    budado

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    I do recommend that if you are a newbies try to find a forex broker site that have cent account and then invest 10 dollars. If you have doubled your money or have earn 10 dollars also. Try to open a mini account and invest 100 dollars and when you double your money in mini account try to open an account in lite account and invest 1,000 dollars.
     
  19. riddick09

    riddick09

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    Also, you can first try it with their demo to have the trading strategy. It's important that they will do to have some tests first and to familiarize with the market. And I think that's also good to have the real trading to have experience in real with the cent accounts as well.
     
  20. jackcm

    jackcm

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    Initial capital depends on how much money traders want to take per month? For example, 500$, then they should have at least 5,000$ so 10% a month is quite low to reach. The lower capital is, the more risk traders have to face.
     
  21. hadg33

    hadg33

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    Nope,initial capital does not depend on how much an investor or trader wants to make in a month. The initial capital should be funds that you can afford to loose,my initial capital might be $10,000 while yours is $100,it doesn't mean we are not both eligible to trade forex.