Hi guys, first post, completely new to Forex. Whoever wrote the content for the Pipsology School, you rock and should be exalted above all men and be given various prizes including a noble peace price, an award for services to humanity and perhaps an Emmy.
To the point of my post, I have seen indications that a good investment amount would be $50k thats appox. R350 000ZAR (South African Rands).
On the current amount I can spare off my salary each month this would take approximately 14.5 years to accumulate (Being able to save R2000.00 or approx. $270 per month) Damn you exchange rate and 3rd world economy.
Given that I plan to practice and learn for approximately 6 months that’d leave me with $1620.00.
Does that seem like a completely unreasonable amount to start with?
Hi Drew
It is possible to start trading live with very small account and there are
many opinions here. there is a big difference between demo trading and live. IMHO, save hard until you are ready, but do not invest money that you are not prepared to lose. Learn all you can and ask as many question as you can. Trade your Demo as though it was a live account, using a small “deposit” similar to that which you will start with
all the best
Babypip’s school would have you believe you need vast amounts of cash to start trading. Their recommendation really is to ensure people don’t trade full lots without proper capital. However, with broker’s like Oanda you can trade literally with a dollar and be able to pick your own trading size to still fall within proper money management.
The dangers of undercapitalization only come into play if you choose an unsuitable broker and you have a bad (or no) money management plan. If you want to start with $100 or $1000, choose a broker that allows fractional lots or even individual units (I only know of Oanda that does this). This way, you can enjoy the benefits of trading closer to your risk %.
large capitalization is only applicable if you swing trade or hold trade for more than a day. But if you daytrade, any small amount will do just as long you make sure to put a stop-loss.
My suggestion is play with the demo for about a week, and if you gained money from it, open an account from oanda or fxcm micro for $50 and do it right away.
So what I advice you since opening a trading account from Africa is quite difficult, it is to start with a very small account, something like 20$ in a micro account. So you could start by buying some Liberty Reserv over the web for 50$, start with a broker which allo micro account, then start with 20$ to see you capacity.
start small and dont invest anything youd care to lose. if you do good with a small account maybe add some more to it as you go. 1000$ would be plenty of money. if you compound the account, while still only trading 1-3% of your account on any given trade then you will make plenty of money over time assuming you’re consistent
I suggest you start with a large enough amount that you are keen not to lose and will be able to take yout trading seriously. It should also be small enough, that it won’t hurt you to lose it.
$20 or $50 dollars isn’t enough in my opinion, cause there is no fear of losing it as it is so small that it can be easily replaced. This might be good intially just to learn the ins and outs of the trading platform, but once you have that then i would suggest $500 minimum. You won’t like to lose that, but at the same time, it probably won’t devastate you either.
But the point is to start small to prove to yourself that your system works. If you start with $50 and make money then you can add to this until you are fully capitalized at $50K and in the mean time your profits are real.
The OP wants to know should he/she wait months or years to start trading and since demo trading is psychologically different than real trading, I would recommend a small account with Oanda as soon as you have a system you think works.
BUT keep a demo account as well and track different systems along side your real account, in case your system turns out to be a dud, you won’t have wasted the months it takes to discover this fact.
Let get the context : the guy is from South Africa, I am from Mozambique, so I know a litle bit what does mean to plan investing in forex over here. 20$, 50% have all their signification !
Look he can save 270$ from his budget every month… so.
Forex market nowday include forex, scammer, analysis-paralysis ect… so you have plenty opportunities to loss money, and in each to learn in the path of your own experience.
This is why I advise you to buy some virtual money, maybe 50$ or 100$ (it will cost already in commission), then from it to invest in your first forex broker for 10$ to 20$. Most of the time you will invest in micro, nano account. So you fund wil be show in cents, 10$ will become 1000 c$, 20$ = 2000 c$. All you need to have the feeling of trading with thousand of dollars !
Why start trading with $10k, $20k or more? So you can lose it? That’s rediculous! Once you are demo trading with CONSISTENT 70% success open an account with $500 bucks or so and trade fractions of mini accounts with a broker that allows it. Have a daily goal. As you become accostumed to trading real money and you continue to CONSISTENTLY trade at 70% increase your lot size. Also, continue to have a daily goal. Once you reach that goal, be it 2%, 5%, 10% or whatever of your account size, do one of the following: 1. exit your positions and go do something more important than trading. 2. move your stop to the point of your goal, set a trail stop and then go do something more important than trading. Why meet your goal then give it all back out of greed?
I hope that shed some light on how much money to start with. I’m learning myself as we all are, but that money management advice I received made more sense to me than even buying at demand and selling at supply.
It’s all about mentality. If you can convince yourself that losing a deposit of $50 means you’re doing something wrong, than there is no reason to invest more than that. As long as there is an impetus to learn from mistakes after a losing trade, a balance of $50 is no different than $50,000.
