In my opinion, the volume or lot of newcomers will trade will depend on their account balance in any way, they should not trade without managing management. If a newcomer wants to trade in Forex with an initial deposit of 100$, I would advise you to open two one-way trades with a maximum of 0.01 if you want to avoid the risk of large losses. Do you agree?
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I would suggest a maximum risk of 1% per trade. But $100 is almost guaranteed not to be an appropriate capital outlay as so much could go wrong and you could lose the lot in a short space off time.
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Yes small position is the key to stay afloat and survive because during initial stages you make a lot of mistakes and it’s wise to optimise costs of these mistakes, i.e. losing small lots with tight spreads.
Risk should be the pillars on to which your trading strategy is standing. There are many people who trade to just earn by chance something out of it due to unreal expectations. A margin of risk which can be taken by a trader is dependent on many factors but most important is the capital in hand. So it is good to calculate risk. I too restrict it to 1%.
Risk should be calculated but it should not be a constraint. A trader ought to learn about different trading styles. Calculated risk does not mean that you cannot explore your options. It should give you a glimpse of the results: in both ways the amount you can earn or the money you lose.
All of the capital should not be invested in one place whether it is ten dollars or ten thousand dollars because no matter how many times we calculate risk or our trade, things can go another way in the markets. I have been using Etrade to invest for the long term but for the short term I have been day trading in forex markets using Fxview. This way I can experiment as well as have a backup option.
Start with 300$ and 0.01 .
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You’re confusing “volume” and “position-size”.
No, not at all.
That’s about SIX times a safe position-size.
Exactly as CavaliereVerde rightly mentions above, $300 is ok for 0.01 lots, not $100 for two x 0.01.
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I think capital should not be an issue in modern times because of the micro accounts. I know you cannot do much with them but they are great learning experiences as well as confidence builders. Also you can earn some profit over your capital but it will not be huge.
Yes micro accounts can give people some confidence, especially ECN accounts which do not charge high spread cost and minimum amount is required. My brokers which I have been using to trade i.e. Fxview and Avatrade would also be good for the traders who do not want to pay huge brokerage fees.