How much money do I need to get started on Forex?4 min read
Nowadays, the popularity of currency online trading has grown greatly. Rapidly developing computer and information technologies have made trading in the currency markets of the world affordable for a huge amount.
Numerous brokers spend significant efforts and funds to promote their services. Many of the marketing tools they use, such as mini Forex, have further expanded the audience of potential customers. Many people, regardless of age and availability of education, consider trading in the Forex market as an opportunity to “knock out” a solid state or, at a minimum, acquire financial independence.
In this article we will try to answer the question that many novice traders care about, how much money is needed and whether money is needed at all in order to start trading on Forex.
What should be the initial deposit?
The greatly increased competition between broker companies, which was mentioned earlier, forces brokers to offer potential clients “unique” trading conditions, in the list of which one of the main places is the minimum deposit. Now you can start trading in the Forex market by replenishing a deposit for 1 US dollar. Of course, with such “assets” it is very difficult to rely on high incomes. At the same time, based on my own, fairly rich experience, I can confidently state that the size of the deposit has little effect on the results of stock trading.
There are many different schemes for calculating the optimal deposit, which take into account the level of planned profit, the number of transactions concluded for specific trading instruments and their total volume, the volatility of trading instruments. All calculation algorithms have a reasoned mathematical and economic justification.
Immediately, I note that the “technical” approach to determining the optimal size of the starting deposit, for novice merchants, is unacceptable. And the point here is not even that it requires a sufficiently high level of knowledge and practical skills – both the first and the second can be obtained by training on demo accounts and studying special literature.
The fact is that for a novice trader, the most important thing is to ensure, for oneself, the most comfortable atmosphere in terms of psychology. Therefore, when making a decision to start trading on a real trading account, one should not proceed from a planned profit, the probability of obtaining which, frankly, is very small. The replenishment of the initial deposit should be allocated the amount of funds, the “loss” of which will not be a disaster for your budget.
At the same time, the deposit should ensure the financial “sustainability” of the trader. One of my friends beautifully compared the trade on the minimum deposit with hanging over the abyss, clinging to its edge with his nails.
And most importantly, the aforementioned brokers offering minimum deposits are usually referred to as “free artists”. This is no one adjustable “kitchen”. Their reliability and, as a result, the safety of your funds are rather doubtful.
Choosing a broker for a currency trader is very important. It is from this choice that his success largely depends.
Opening a real trading account in a powerful and reputable brokerage company will require the diversion of funds, in the form of an initial deposit, in the amount of 100-300 US dollars. It is this amount that should be guided by a person taking the first steps “in the open spaces” of Forex.
Shamelessly distorting Count Tolstoy, one can say that all successful traders are equally successful, and “not successful” are not successful each in their own way. “Equal” successful traders is a clear understanding of their goals and objectives.
All of the above, most likely, will disappoint those who expected to get an unequivocal answer to the question: “how much money do you need to start working Forex”. No one will ever be able to answer this question. But, nevertheless, a novice trader needs to understand that his deposit of less than $ 100 will not lead him to success.
“No deposit start”
Recently, the theme of “zero” the beginning of online currency trading has become very popular. First of all, it is actively used by “young” brokers fighting for “a place under the sun” as a tool to attract, or rather, “lure” new customers.
There are two options for “no deposit start”:
- Getting no deposit bonus.
- Participation in a tournament or competition for demo account holders.
The first option is better not to consider. Its essence is that by registering an account, you receive a bonus of $ 10-50 from a broker, and you can start trading. All this looks quite respectable until the moment when you decide to withdraw the earned profit. To do this, you first need to replenish the deposit in an amount equal to the bonus and the profit. Given that brokers who offer such schemes of work, “all the” belong to the “kitchens” mentioned earlier, the whole enterprise looks rather doubtful.
Participation in a contest or tournament on demo accounts is more attractive. You should not count on huge prizes, moreover, a broker who announces “many thousands of” prize funds should make you suspicious.
Participation in such contests and tournaments gives you the opportunity to test yourself “in action”, and allows you to acquire “start-up capital.