Insufficient capital: The most common factor that leads to lose

[barood4money]

some times I tend to have a second though that there are nothing like in sufficient capital in forex trading since the leverage and margin is there which can help enhance the amount we are trading with and one can trade on low lotsize when the capital isnt much.

Yes, I agree with that. There is nothing like sufficient capital at forex trading. It totally depends on the person to person. Anybody can invest any thing, whether $10 or $10 billions, it no matters.

 

[Angelic]

Yes, I agree with that. There is nothing like sufficient capital at forex trading. It totally depends on the person to person. Anybody can invest any thing, whether $10 or $10 billions, it no matters.

Due to the minimum amount most brokers accepts are 25$ and above, someone who is not having more than that amount can merely trade in such a way that the lot sized choose , should correspond to the capital at hand.

 

[barood4money]

Due to the minimum amount most brokers accepts are 25$ and above, someone who is not having more than that amount can merely trade in such a way that the lot sized choose , should correspond to the capital at hand.

Yes. most of the brokers accept minimum amount of $25. But there are few brokers who accepts the minimum amount of $10. And can get all the facilities.

 

[Angelic]

Yes. most of the brokers accept minimum amount of $25. But there are few brokers who accepts the minimum amount of $10. And can get all the facilities.

Brokers that accepts that minimum account are brokers that supports the cents or micro account of which I know that profits being made there are just peanuts and are also for learning purpose. People who makes use of that amount will only earn litle amount due to to an extent capital matters.

 

[barood4money]

Yes, it is true that at cents accounts the earnings gets limited as the investment done is little. But still for poor people it is beneficial, as they will be quite happy if they can earn small profits also.

 

[Decub]

Yes, it is true that at cents accounts the earnings gets limited as the investment done is little. But still for poor people it is beneficial, as they will be quite happy if they can earn small profits also.

Exactly, there are traders who can't just afford that which we call very little and they shouldn't be deprived of trading. I think that is the brain behind the introduction of a cent account. There is also a joy in gaining profit, irrespective of how much the person gained.

 

[barood4money]

Exactly, there are traders who can't just afford that which we call very little and they shouldn't be deprived of trading. I think that is the brain behind the introduction of a cent account. There is also a joy in gaining profit, irrespective of how much the person gained.

Yes that is true. When we trade we expect 10 bucks a day. There are many capitalist who expects 1000 bucks a day. But there are many people also who gets very happy to earn 1 bucks a day. And thats why for some people cent account is very beneficial.

 

[Decub]

Yes that is true. When we trade we expect 10 bucks a day. There are many capitalist who expects 1000 bucks a day. But there are many people also who gets very happy to earn 1 bucks a day. And thats why for some people cent account is very beneficial.

I was going through some posts in another forum when I came across a post a member made that he would rather not trade than trade in cent account because of the low Investments and earnings. Well, even before I could reply, another have, misquoting him in the basis of; the person's country which determines the value of currency. To some, a Dollar is a big Money while to others, its not what mentioning.

 

[barood4money]

I was going through some posts in another forum when I came across a post a member made that he would rather not trade than trade in cent account because of the low Investments and earnings. Well, even before I could reply, another have, misquoting him in the basis of; the person's country which determines the value of currency. To some, a Dollar is a big Money while to others, its not what mentioning.

Yes. It is true. In our country if anybody is earning daily 10 bucks, then is superior from others. Because from a job here average people earns 4-5 bucks daily. We can buy a good jeans at 12 bucks.

 

[Decub]

That tell the the factor that really contributes to what people may term as insufficient capital depends on the person's location and the value of currency in that place. I think insufficient capital might be a reason depending on the circumstance at that time.

 

[Daisy]

I guess you can always get leverage or bonuses so I think capital is a little bit of a problem in forex but its not all to it. Sine in forex, one can start with low capital and still be able to trade and use leverage or bonuses. You can also use cents account if you don't have a lot of money but the forum bonuses nowadays are so good that a person would always have enough to trade with. Now, when they get a high leverage, they will lose all their money if the trends go against them. So, to offset that they have to use a moderate level of leverage.

 

[barood4money]

I guess you can always get leverage or bonuses so I think capital is a little bit of a problem in forex but its not all to it. Sine in forex, one can start with low capital and still be able to trade and use leverage or bonuses. You can also use cents account if you don't have a lot of money but the forum bonuses nowadays are so good that a person would always have enough to trade with. Now, when they get a high leverage, they will lose all their money if the trends go against them. So, to offset that they have to use a moderate level of leverage.

Yes, I agree with you. We can use the facility of leverage. Good step can give good profit. But wrong move can be reason of big loss. So whatever we do, skill and knowledge about forex trading is very necessary.

 

[Decub]

Yes, I agree with you. We can use the facility of leverage. Good step can give good profit. But wrong move can be reason of big loss. So whatever we do, skill and knowledge about forex trading is very necessary.

Exactly, what matters is that we took some good steps to protect that little capital. Even if we are given the whole capital on earth to start trading and there is no Strategy on our own part to safeguard it, it will still diffuse with time and we will be left with nothing.

 

[gkintl]

Not all have surplus capital or deep pockets. It is the ability to trade within our means that matter. Professionals never allocate more than 1/3rd of total capital in a trade. This enables them to avoid margin calls and liquidation of positions. As the size of account grows a trader will be able to allocate more capital. This is a cyclical process. Insufficient capital, even though a reason, can be certainly managed if proper planning is done.

 

[jackcm]

Not all have surplus capital or deep pockets. It is the ability to trade within our means that matter. Professionals never allocate more than 1/3rd of total capital in a trade. This enables them to avoid margin calls and liquidation of positions. As the size of account grows a trader will be able to allocate more capital. This is a cyclical process. Insufficient capital, even though a reason, can be certainly managed if proper planning is done.

1/3 of total capital is still too much for us. Most of those investors don't use leverage like retail traders to increase earnings but their capital is big enough to let them have earning that satisfies them.

By the way, how can you mange your capital well if it's only 5$ - 10$?

 

[Daisy]

I think it could be a problem if the trader does not deposit enough money or have money or just using bonuses only then it gets problematic, not so profitable trades. I mean in order to earn big you have to have big capital so its part of the game. I think traders who want to make it big have to have some modest amount of money to continue making money. They must have superior trading skills in order to make even more money.

 

[gkintl]

Due to the minimum amount most brokers accepts are 25$ and above, someone who is not having more than that amount can merely trade in such a way that the lot sized choose , should correspond to the capital at hand.

I agree with your opinion that trade size should correspond to the capital in the account. This would enable a trader to reduce risk and avoid margin calls. Mostly traders who use higher leverage and trade size face issues related to capital. So, it is wise to determine the lot size prior hand. This would enable a trader remain stress free. As the account size grows, the lot size can be increased.

 

[riddick09]

Apparently, this is a major problem indeed that the traders often have here problem in their capital. That when they don't have decent capital they are going to expect easily reach margin call and also that they are going to have many losses or not have more margin to trade more.

 

[Pettyeve]

Insufficient capital can or cannot contribute to the reason traders will fail but depends on how insufficient the capital and skills are. A good trader can trade with as little as $5 and still hold it. A bad trader can go high up to a thousand dollars and blow it up. We talk about the fear of but it hits the unskilled most times.

 

[Decub]

Well, there is the tendency that a trader which has little capital will not survive it long in the market. This could be due to a lot of factors but the most being that it is always difficult to manage little capital as it affects your choice of lot sizes.