its a tough question of course, generally we think for beginners minimum $500 is more appropriate , but it can be useless if there is no money management with accurate trading strategy. so, we have to develop our trading strategies , if we want to get maximal result by means of minimum investments.
1 Like
It depends on a lot of things! You’ll see YouTube videos of people who started with €40 or 50 (sorry, I’m cable-biased), and turned it into €400 or 500 in a matter of days. This isn’t a lie per say, because there is no defined “minimum” that you need to trade in forex - but you do need to look at the minimum requirements of your chosen broker. The problem with small amounts of course, is that if you open an account and deposit €25, unless you’re margin trading (this is, trading with borrowed capital), you won’t make a significant profit because, the value of currency pairs changes in very small decimals (0.0001 in most cases). This is called a pip. You can trade with any amount you like, as long as you’re familiar with the concept of “leveraging”, and, of course, risk management.
Trading Leverage – A Real Look at how Traders May Use it Effectively courteous of @FOREX.com
This is an interesting article that states starting with less than $10k lowers your chance to be a profitable trader.
Those with more than $10,000 in average equity were more than twice as likely to be profitable at 43 percent.
1 Like
The minimum capital depends on your demo practice and how you have learned the trading. Everyone has done the practice with the different amount so you may also know how much risk you can handle.
1 Like
$10000 min? Maybe because good traders have funds so the stats work in that favour. But to say increasing your funds increases your chance of being profitable is a load.
Demo trade, try a no deposit bonus account - if you can’t increase the starting amount over decreasing - your not ready.
2 Likes
We agree with you, @Aidobeast
The key point we took away from the study mentioned above is the negative correlation between leverage and profitability.
Percentage of Profitable Traders Grouped by Average Effective Leverage Used
https://media.dailyfx.com/illustrations/2015/06/29/forex-trading-using-trading-leverage-effectively_body_Picture_4.png
Individual Trade Winning Percentage Became Worse as Leverage Increased
https://media.dailyfx.com/illustrations/2015/06/29/forex-trading-using-trading-leverage-effectively_body_Picture_3.png
That means a trader who has $1,000 to invest in the forex market instead of $10,000 can still reduce their trading size accordingly. That way they use less leverage rather than trying to match the trading sizes of people with more money in their accounts.
With FOREX.com you can trade micro lots which let you risk as little as 10 cents per pip. (Some smaller brokers even let you risk even less than 10 cents per pip.) On that trade size, you could risk 100 pips and that would be only $10, which is 1% of an account with a $1000 balance.
You may find this article helpful in understanding the rationale behind risking only 1% per trade: http://www.newtraderu.com/2016/07/19/important-math-trading/
3 Likes
Hi @seatleaser,
We agree with @Butter_Kiss. The answer is zero. Most forex brokers will let you register for a free practice account and place demo trades with no money at risk. Take advantage of this opportunity to develop an understanding of the market, so you can trade with confidence.
Then you won’t ask for the minimum (which is $50 with FOREX.com and even less with some smaller brokers), but instead will determine the amount you want to invest based on a more realistic comparison of your forex trading with the other investment opportunities available to you in stocks, bonds, real estate, business, etc.
FOREX.com is one of the few retail forex brokers to be regulated on four continents, and the requirements can vary slightly from one region to another. Where you you live, @seatleaser?
Generally speaking, as part of your account application, you will have to provide proof of your identity and home address. If you are applying for a corporate account, you will also have to provide proof for the corporation.
You can use the same methods to withdraw funds from your account as you use to make a deposit which include check, electronic check, bank wire transfer, credit card (not available in the US) and debit card.
some discord i have with you. basically we never do much losses in demo when trading , so if we invest according to demos experience , i think its not a good decision .
1 Like
That’s an interesting observation you have made about your trading, @TomCooper.
Why do you believe your demo trading is more successful than your live trading?
It will depend on the capital amount you have in your hand. For a millionaire $50000 is not a big capital and for me $1000 is big as a i am a part term trader. But you can start with mini accounts since in this competitive market smaller investment can help you to survive the market in the initial level.
1 Like
if we have good knowledge with real money management any kinds of amount can bring good result. so, emphasis on your trading plan and money management.
Sir, i had a good result in demo trading and was successful with BB. but when i use the same strategy with same analysis didn’t found the good result.
Hi @TomCooper,
You say you used the same strategy with the same analysis on both demo and live trading, but got different results.
Is it possible you could have overlooked some important differences? Between your demo account balance and your live account balance? Between the market conditions (volatility, trends, correlations, etc.) during the time you were demo trading and the time you were trading live?
The following thread discusses this topic in more detail: Demo = win , live = loss
We learn real money management with two methods first is demo practice it will tell you basic things and when one is good at demo account he can use live trading with small investment to check how much his management plan is efficient . do much work over here because real trading is different from live and choose best plan for you.
i took a lesion from this forum , there is not much people who have good experience in demo , so by using demo practice how much effective to improve money management skill , i am confused.
LOL. average experience in here about demo or micro account result , it completely depends on your knowledge and experience.
Everything with demo practice depends on you that how you are going to take it. If you are serious about your trading then you are going to practice in a smart way.
we all traders have seriousness just before trading but when start practically we lost it and trade at random.
but most of the traders above all beginners don’t serious when demo trading , because they don’t believe the importance of this trading place at all.
If you want to turn trading into your main source of income, with the intent of living off it, then the bare minimum is 50.000 in my opinion. You can’t make a serious income without trading standard lots, and you can’t trade standard lots with less than 50.000 - unless you ditch away risk management, but then you can do that with 100 bucks.
If you want to earn some money to set aside, then anything between 2000 and 500 would do fine. You can expect to make up to 50 bucks a week - best case scenario.
If all you want to do is learn, but you don’t want to demo trade because you feel like you’re lacking the psychological aspect of having real money on the line, then 100 bucks is also okay. Just assume you’ve already lost it all.
1 Like