Trading on Forex with a minimum deposit - from initial losses to sustained profits
How much money do I need to trade on Forex?
When it comes to Forex trading many people think that a deposit to work at this exchange market has to be big. Well, to a certain extent such opinion may be considered fair.
Indeed, it is rather difficult to count on serious earnings without big money invested to trade at Forex. But this is mostly true for traders who are experienced enough to maintain stable and profitable trading. But what a beginner should do, because to become a professional you have to go through certain establishing stages?
Many brokerage companies cooperate with beginners and offer them an opportunity to open a cent account.
- The minimum amount to trade forex on such an account is just a few dollars or even one, and you can use it to work on the financial market.
Unfortunately, not all traders take full advantage of such opportunities.
How do beginner traders often trade on the market?
Very often, and this is proved by many researches, people starting to trade on Forex are not inclined to take the process of education seriously so that they could achieve a high professional level.
As practice shows most of the newbies are rather big-money hunters. In most cases, they either try to accelerate their deposits or rely on some super profitable Expert Advisors that can be downloaded for free. Actually, there's nothing to be surprised about, as almost every Internet advertisement runs on the black and white saying that one can earn $50-100 per day in the Forex market almost on autopilot, and the deposit size on the account will steadily grow.
Of course, not many people would refuse to earn hundred dollars a day easy, and even in online mode. And so a beginner, being fully confident in his actions, opens a trading account, puts $100 to $200 on it, and then runs the "wonder-advisor" in the hope that it will bring material prosperity.
It may happen so that at first the initial deposit slightly grows, but then, if a drawdown appears on the account, the beginner is not able to change something, because of the lack of knowledge in trading and the algorithm of the advisor work.
How does it all usually end? Probably nine out of ten beginners who lost their money that way can answer this question. Similar results can be expected by those desperate traders who from their first steps in the market try to increase their deposit but do it haphazardly and inefficiently.
What should be the minimum amount for Forex trading?
At the initial stage it often happens that a trader loses the money deposited into his trading account. It may happen more than once. It cannot be ruled out that a trader loses the second or even the third deposit. Unfortunately, it is reality and has to be reckoned with. That is why every beginning trader should remember one simple truth:
The first deposit to the trading account should be such that in case of losing this money it does not affect the general financial well-being of the person, does not cause psychological trauma, does not deprive him/her of confidence and desire to trade in the financial market in future.
As for the amount of deposit for beginners, it may be different, and it is difficult to name a concrete figure. After all, the loss of ten dollars is undesirable for someone, while someone trading currency on Forex may lose a hundred or more dollars without feeling it. The main thing is not to strive for immediate making big money by trading on Forex, you should do it gradually, finding the optimal size of deposit which will help you to feel comfortable in difficult market conditions.
How scared are you of losing your first deposit?
Often beginners perceive losing their deposits rather painfully. Such a loss may make a trader disappointed in trading and doubtful that it is possible to make any profit on Forex.
But if one looks at the situation sensibly, without emotions, it becomes apparent that the loss of money occurred primarily due to mistakes made by the trader. The main thing in such situation is not to overreact and look into the reasons of losses to draw conclusions and not to repeat such mistakes in future. After all, the sooner forex trader understands that every loss of money in Forex trading is a payment for his own mistakes, the sooner he can reach the level when there are fewer mistakes and the profit is much higher.
Thus, we can say that the currency market is not a place for fast enrichment. You have to approach trading thoughtfully, and sometimes even philosophically. And the philosophical side of the matter is that regardless of the size of the deposit, its loss shall, first of all, make the trader to think, draw conclusions, in the end, decide whether it is the right thing to do or not. And if the answer to the last question is affirmative, the first losses, no matter how unpleasant they are, must become a powerful incentive for further success in market trading.