Even the biggest profi can’t trade without losses. You can trade with 100 dollars, but you need to have had the practice and a lot of experience.
There is no strategy which keep you away from the loss, so be careful, after that I would like to say that forex is risky and tough business and trading with only $100 will be risky and you will have to do careful trading with the amount of $100.
hi mate
I’ve been trading now (Successfully ) i might ad, for several years.
let’s address a few questions here
- CAN I TRADE PROFITABLY STARTING WITH ONLY $100
ANSWER : YES, but there’s a catch, and it’s not 100% certain, it’s more like 70% certain
next question
- can YOU do the same thing as a beginner
ANSWER : be clear on this… NOT A HOPE IN THE WORLD, not a chance, ok
a beginner with less than $300 is 100% guaranteed to lose their entire account
let me say it again…
100% GUARANTEED TO LOSE
my advise to you is this
-
if you are wanting to start with $100, it means you are getting desperate to make money. stop doing that
-
stay here on babypips school and keep learning
-
open a demo account with a reputable broker and keep trading UNTIL YOU CAN TRADE PROFITABLY FOR 6Months OR MORE
until you can do that, do not even consider putting money down
you’ll likely find that you’ll be practicing for a year or more… KEEP AT IT -
when you start, i suggest you start with around $3,000 but no less than $1,500
and when you do so, do not put down a lot size that is any greater than 0.05 Lots
this will ensure that you manage your risk correctly (for the most part)
now the reason why YOU (A BEGINNER) cannot make money from $100 is because of the way minimum lot sizes work and when you factor in the amount of movement in a currency, you’ll quickly understand that your money is all but gone in one move.
look at the logic
a broker will offer you up to $300 credit in your account if you open a live account
so… they will say, if you put in $100 we will add $300 to it
YOU KNOW WHY THEY DO THAT ?
it’s because they know that if you start with $400 it is a MATHEMATICAL CERTAINTY that you will fail
so… RULE 1 : do not start with anything less than $1,500
if you can’t afford it… FOREX IS NOT FOR YOU
hope that answers your question
Very Well Said! You have highlighted the point which is missed by the most of the traders as they think that they could earn in the Forex by just entering the market. I do agree that you should atleast have $1500 to start with and I would like to add more that if you cannot afford it, then just do it part time, that would be quite nice if you have another source of income and it would be wonderful if you have a fixed income source to back you up at the time when you incur loss.
It is quite difficult to get profits from less investment as $100 when we trade on demo we handle in thousands of capital. But for beginners this amount is not bad , They should try trading with low risk trading . With $100 they will do training of trading and get small profits.
Are you saying that all the “nano accounts” out there are not worthy of any form of consideration ? or is there some other reason why “It is a mathemetical certainty” ?
If you try to trade here without losing money, then definitely you’ll lose your money too early! That’s the reality!
100? 1000? 5000? 10k? 20 50 ?!
Whilst it may not be entirely a “mathematical certainty”, I think there is an interesting point here!
This is more of a question than an answer because I have never studied the terms of these kinds of broker offers, they never existed in my early days.
But is it so that when the broker adds $300 to a $100 account then any losses are deducted from the trader’s own funds or from the brokers $300? ON other words, if losses reach $100 then the account is technically blown?
If so, then there really is an important issue here because by increasing the trader’s balance to $400, the broker is also encouraging traders to work their risk/money management off of $400 instead of $100 which is a 4x increase in risk exposure - which certainly does mathematically increase the risk of losing all of one’s original capital?
Is that how these offers work?
I don’t know where that table of yours came from - but none of those ar “Zero sum” - the more you trade, the more disappears from the market in the form of spreads. Many years ago, day traders aspired to S&P minis with DMA - yet they do not appear on the list - Has S&P gone bust then ?
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I was also wondering.
Clearly, much of the information in it is mistaken, anyway.
day trading these are zero sum game , the market daily basis net gains
You can open positions with 0.01 Lot size if your broker gives you this option.
But I think that even if you will win, the amount of the winnings is so low that you will get tired very soon because you won’t see any real money.
To understand what is the meaning of 0.01 Lot Size see below.
If 1 pip in 1 Lot Size = 10$
Then 1 pip in 0.1 Lot Size = 1$
And 1 pip in 0.01 Lot Size = 0.1$
(Of course, the value of the pip in each pair is different)
So think about how many pips you need to earn for getting a reasonable profit value.
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I think that the first thing that needs to be said that you can’t trade without losing money altogether. All trading strategies take into account some loss, the point is to earn more than you lose.
Sharonov above explained lots pretty well so I won’t repeat him here, I just concur, open positions with 0.01 lots if you want to trade with such a sum.
Agree with you, small trading capital is not a big problem if you have a good trading strategy or system.
Small capital isn’t a problem, for the people, who have good amount of trading skills and strategies that they could use in the Forex Market. You should gain some good amount of practice to ensure your success in the Forex Market.
thank you for the comment and i agree, it is good to have regular income as backup. SO LONG AS… that income doesn’t become a slush account that permanently offsets the losses. and since we are on the subject of back up incomes, it also a very good idea to have 2 STRATEGIES, one long term, (annual Goal) and one Daily or weekly goal. i usually place 2 trades, 1 keeps rolling and the other is a slush trade to facilitate a regular income, this is not the one that you are going to get rich on, it’s just one that will replace your income or at least in part.
No its not deducted form the traders account as you stated
it works like this… STEP BY STEP (for the benefit of the beginners)
-
A Beginner will show interest in a brokerage
-
Beginner will open a DEMO Account
-
Said Brokerage will assign an Account manager to pester the “Firetruck” hehe out of said Beginner, or…
to APPEAR as if Said Account manage is Beginner Best friend and as if the account manager has Experience beyond the stars, Generally they know stuff all and you’ll be luck if they have any clue about trading to begin with
they do however know how to talk the talk -
Account manage has a goal, GET THE BEGINNER ON A LIVE ACCOUNT ASAP
now.
5. To add frosting to the cake, Said Account manager says something like this
"Joe Blo you seem like a cool bloke mate, look, i’ll tell you what i can do. we, as employees get access to company trading accounts and we have access to initial funds if we want to trade our own accounts. what i can do for you is this, i can take my employee benefit for this month which is $300 and i can put it in your account, BUT… YOU HAVE TO OPEN A LIVE ACCOUNT TO BEGIN WITH SO I CAN PULL IT OFF, just deposit something small, like $100 and i’ll put an extra $300 into your account"
THAT’S HOW IT’S DONE hehe
in some way shape or form, regardless of the BS story that is told, this is what is done
LEGALLY: the account manager usually is not allowed to trade at all or hold a forex account elsewhere (if they are allowed to trade within the company to begin with).
but. WHO REALLY COMPLAINS ANYWAY.
and as far as Regulation is concerned… hehe What a joke.
so… now
- Said Beginner has $400 and is ready to become a bloody millionaire hehe
they figure this
LISTEN CAREFULLY BEGINNERS
HERE IS THE TRICK TO IT
You will say to yourself… “cool. so i have $300 that is not mine, ok, what i’m going to do is this, i’m going to make double that, so i’ll get to $800 or $500 then pull out $100 and then. IT’S ALL PROFIT” hehe
now… THEORETICALLY… YES IT IS
REALISTICALLY … Not a bloody hope in the world hehe
oh. also, When he deposits that money into your account
YOU ARE NOT ALLOWED TO INSTANTLY WITHDRAW YOUR $100
you’ll be placed under an agreement (if you get an introduction bonus) best case scenario… You cannot withdraw a cent until your balance gets to $1,000
BECAUSE ACCORDING TO THE MATH, you won’t make it there
if however YOU DECLINE THE INTRO BONUS (Which honestly, should be everyone’s policy) you are then free to put money in and take it out whenever the bloody hell you feel like it,
now. as for losses and how it works
if you have Account Balance $400
you blow $50
you now have a balance of $350
now here’s your question
if you blow another $50… IS YOU ACCOUNT BLOWN… ANSWER : No
(at least not with a reputable broker)
a reputable broker will create the IMAGE of honesty, so…
they WILL HONOUR the agreement that you can if you like
now, loose another $300 and be left with $50 and that’s fine
and let’s now say that from that $50 which isn’t yours, let’s assume you make a million dollars (you won’t, but let’s dream for a second)
THEY WILL
- HONOUR THE TRADES
- YES THEY WILL PAY YOU 1 MILLION DOLLARS INTO YOUR ACCOUNT
so… the intial offer is valid and counted as your money
NOW THINK ABOUT THIS LOGICALLY
because that is the case and they do it liberally
don’t you think there is a method behind the madness
ANSWER : yes there is.
it’s a trick
you see
HERE IS HOW EVERYONE SHOULD ATTACK A FOREX PROBLEM
- Pull out your calculator or spreadsheet NOW
- if your initial investment is $100 YOU MUST PROTECT THIS (this is called Risk Management)
- if the broker gives you +$300 you have a $300 Safety barrier
so… Your goal is CALCULATE RISK BASE ON $300
but… YOU WON’T
HERE IS WHAT YOU WILL DO
- You won’t understand leverage
- You won’t understand Risk Calculation
- most of all, YOU WILL GET GREEDY, don’t fool yourself. ok
so you’ll do this
Step 1. let’s say you are trading EUR USD
at first you’ll be scared and you’ll put a min amount of lots on, YOU’LL PUT 1 TRADE DOWN for 0.01 Lots
which is 10 cents per pip (as per your training in babypips)
you’ll set a goal for , let’s say 10 pips
so… your gonna make $1
Step 2. let’s say it takes 2 hours to make those 10 pips
You are going to say to yourself “Firetruck this” this is taking too long
i’m gonna ramp up the lot size,
Step 3. You’re gonna say something like this
"hmmm, i’m got $400 here, so … let’s say that $1 per pip SHOULD BE OK, so let’s try for 10 pips and we;ll make a modest $10"
my input to this is… ARE YOU BLOODY CRAZY or what ?
step 4. HERE IS WHAT YOU , AS A BEGINNER, DOES NOT SEE when you do this
if the market goes in your favour, it’s ok, to a point, you get your 10 dollars and you do it agian,
but this is inevitable to fail
but here is what will realistically happen
YOU GUYS DO NOT UNDERSTAND HOW “ORDER FLOW” WORKS
go and research ORDER FLOW
so when you enter a market, to some degree, you affect that market, if you are buying, SOMEONE HAS TO SELL
if you are winning, SOMEONE HAS TO LOSE FOR YOU TO GET PAID
so… when you enter with a trade size of 0.1 lots ($1 per pip)
let’s say the market goes 50 pips the wrong way, which is very common
or let’s say it’s 100 pips, which is also common, anything up to 150 pips is common,
so… ok
you shit yourself and you just lost $100
that’s 1/4 of your account… OR IS IT
ACTUALLY… IT’S 100% OF YOUR ORIGINAL INVESTMENT to be honest about it
the broker see’s your habits and SMILES
because they know if you continue like this, you are gone in less than a week
so 2 things comes into it
- MATHEMATICS
- HABITS AND EMOTIONS
and the statistical likelihood of losing can be calculated mathematically BASED ON A PERSON’S PSYCHOLOGICAL BEHAVIOUR AND EMOTIONS
this is why it is mathematical certainty that you will lose if you start with less than $1,500
let alone under $500
and let’s say BEST CASE SCENARIO
you are emotional strong and can control your emotions
and let’s you are a mathematical genius and have done the right thing and calculated your risk perfectly, which THERE IS NO WAY AS A BEGINNER THAT YOU WILL DO THIS… hehe
but let’s says you have
one thing remains…
YOU ARE A BEGINNER, and they have been doing this stuff for over a hundred years. you have no chance.
you will inevitably make a beginner mistake (Because this is how you learn)
and in that mistake THEY WILL TAKE PROFIT
so what sort of risk should take
people usually say 10%, 20% hehe that’s nuts
Never go above 3% of your account balance
NOW LET ME SHOW YOU ANOTHER BEGINNER MISTAKE
Let’s say i was one of those forex companies that says… pay me $2,000 and i’ll teach you to trade
(Pretend like you just paid me $2,000 ok WORK WITH ME HERE)
now… i tell you as a mentor
"Manage your risk"
and you say "oh, ok, thanks i’ll go and do that"
then you say "Martin what do you think is a good risk "
and i’ll say “No more than 3%”
so you’ll do this
Calculator out
ACCOUNT BALANCE = $400
1% X 400 = $4
therefore $4 x 4 = $12 (3% risk)
AWESOME, so now you know that you can only risk $12 per trade
so, you’ll put down 0.1 lots or even 0.05 lots (50 cents per pip)
now… at the end of the trade, if it goes against you, you’l lfind that you probably lost $30 - $40
now… what happened ?
and you’ll blow your account like this and then…
you’ll come back to me and say “what happened,” and i’ll reply “you didn’t manage your risk properly” HEHE
Standard industry BS to throw the buck onto you
and WE CAN PROVE IT
here’s proof
IT IS ACTUALLY YOUR FAULT
look
3% x $400 = 12 dollars total Risk per trade
now since 100% divided by 3% = total number of times you can lose in a row until you blow your account
answer = 33.3333
meaning, you can stuff up 33 times in a row before you account is blown
NOW I’LLTELL YOU RIGHT NOW BEFORE YOU EVEN PUT DOWN THE FIRST TRADE
as a beginner you could lose over 50 trades in a row before you even learn how to do this
THAT’S WHY THEY KNOW YOU’LL GIVE BACK ALL THE MONEY
so the solution here is Lower that 3% to something like 0.01% when you start
now, you have $12 per trade that are risking
BUT THE CATCH IS YOU NEED A TRADE PLAN
and you won’t do that
that’s your first mistake
then
you’ll guess the lot size based on a gut feeling
SECOND MISTAKE
finally, you don’t understand that RISK IS NOT ABOUT TAKE PROFIT
it’s about STOP LOSS
here is a trade setup to explain risk to you
Take profit here (10 pips when buying)
Enter here ----- 0 Pips (we are assuming 0 pips spread)
Stop Loss is here (-10 pips)
to calculate this correctly this is what you do
- I have $12 to risk
- My stop loss is at -10 pips
- so… $12 divided by 10 = $1.20
- so lot size = 0.12 lots
so… the THEORY IS… if your trade goes against you by NO MORE than 10 pips, you will lose NO MORE than $12
THERE ARE 2 PROBLEMS HERE
-
the closer you put your stop loss to your entry THE HIGHER THE RISK OF BEING TAKEN OUT without reason
-
if you develop a habit that YOUR TRADE SIZE IS ALWAYS 0.12 WATCH WHAT HAPPENS NOW
SCENARIO 2.
you decide, i’ll put my stop loss lower so it doesn’t get taken out
so you put it say 100 pips below the line and your take profit is at 50 pips
and you feel like a GOOD LITTLE VEGEMITE
you’ll say shit like “I have a risk to reward ratio fo whatever” hehe… Good for you, here’s a cookie … it doesn’t mean anything.
because let’s do the math on 100 pips stop loss
if you set your trade size to 0.12 $1.20 per pip
and it goes 100 pips against you
YOU JUST LOST $120 not $12
this is the part where you will be saying WTF, how did i just lose over $100
and… voila you just lost over 25% of your entre account, NOT 3%
what you should have done was this
$12 divided by Stop loss of 100 pips = 12/100 = 12 cents per pip
so… Your lot size is 0.012
oops… but look at that, you can’t do 0.012
so… Your choice is 0.01 or 0.02
YOU WILL CHOOSE 0.02 because it sounds like a small amount
in actual fact you are trading at 20 cents per pip instead of 12 cents per pips
after 100 pips this means they take $8 extra off you because you were too stupid to work it out
so, to summarize this monster post
IF YOU START WITH $400
AS A BEGINNER
to manage risk correctly, YOU MUST START WITH A LOT SIZE OF 0.01
but again… as a beginner you are going to make more mistakes and you will lose more than 33 trades NO QUESTION ABOUT IT
to put it simply
the way you know you’ve got it is
IF YOU CAN TRADE SUCCESSFULLY AND PROFITABLY FOR 6 MONTHS WITHOUT BLOWING THE ACCOUNT
so… can you NOT LOSE 33 trades in 6 months as a beginner… answer NO
now let’s say you manage your risk and you risk 1%
but… YOU CAN’T… SEE
because 1% of $400 = $4
if you are conservative about your stop loss, it should be at around 50 pips
so… $4 divided by 50 pip = 8 cents per pip
SEE… YOU CAN’T DO IT
it has to be a min of 10 cents per pip
so… ok you raise your stop loss a little
but THE MORE YOU RAISE IT, THE MORE LIKELY IT IS TO GET TAKEN OUT
AND… YOU STILL LOSE
the reality is
You’ll get frustrated at the small wins and want to win quicker … hence EMOTIONS AND GREED
you’ll increase the trade size to something like 0.05 lots
well, if you do that
Mathematically you just stuffed yourself
ONLY 2 THINGS CAN HAPPEN NOW
- YOU HAVE TO SET A REALLY TIGHT STOP LOSS in which case it’s a very high risk
or - YOU WILL SET THE STOP LOSS WHERE YOU WANT IT , BUT… WHEN THEY TAKE YOU OUT,
YOU WILL FEEL IT IN YOUR POCKET, you will suffer losses in excess of 30% per trade
meaning… 3 or 4 Losses = BLOWN ACCOUNT
Make no mistake, it is a mathematical Certainty and a psychological certainty that you will lose if you start with less than $1,500
LISTEN CAREFULLY NOW
PEOPLE WHO DO NOT HAVE $1,500 (Actually $5,000 or more) to start with are in financial shit to begin with
and
they are there because of THEIR HABITS
THOSE HABITS WILL WORK TO THE BENEFIT OF THE BROKER
hence… YOUR PSYCHOLOGY WILL WORK AGAINST YOU
there is a solution…
here’s the answer
CHANGE YOUR HABITS
TAKE THEIR POWER AWAY FROM THEM
TAKE WHAT THEY USE AGAINST YOU, AND LIMIT THE TOOLS THEY HAVE
this means
They use Low balances - People who start with small account lose
SOLUTION : Start with a larger amount
They use your greed
SOLUTION : don’t be greedy, master this.
They use your depression
SOLUTION : Become cold towards money, whether winning or losing, do not even react to it. THIS IS THE HARD PART
they use lack of planning against you
SOLUTION : Plan your trades and religiously stick to your plan
they use confusion against you
SOLUTION : when you are winning and it turns around the other way DO NOT STOP YOUR TRADE… DON’T BE STUPID
they do this because they don’t want to pay you and technically if you close the trade they win, it’s a mind game.
their job is to confuse you when you are correct and to keep you in your current frame of mind when you are wrong.
the solution is… PAY ATTENTION TO YOURSELF WHEN YOU ARE WINNING AND LOSING AND MONITOR WHAT YOU DO AND LEARN FROM IT
When you decided on a trade, hold the trade no matter what
this should be a very robotic and rigiid and logical decision
LIKE THIS
in a trade only 3 outcomes are possbile after starting the trade
Outcome 1 : your take profit gets hit and you win
Outcome 2 : your stop loss gets hit and you lose
Outcome 3 : nothing got hit and the trade is still rolling
nothing else is possible except for
outcome 4. USER CLOSED THE TRADE MANUALLY (don’t do this, this is stupid)
NOW. if you take away these powers (if you will) from the broker (These Advantages of greed and psychology) you GREATLY INCREASE YOUR CHANCES
this is also a form of risk management
now let’s look at binary options for a second and why there are so stupid
in Binary options YOU MUST BE CORRECT IN YOUR GUESS… TO THE SECOND
because of the short time frame you cannot research anything , that’s a fact
because of the short time frame most indicators mean nothing, it’s just a game and you are looking at screen candy
trades happen quickly, meaning you are put in a situation where you habit is TO REACT AND NOT TO THINK.
this increases the chance of loss
so HAVE WE LEARNED ANYTHING FROM ALL THIS TYPING HEHE
it’s a mathematical certainty
but, ONLY IF YOU ACCOUNT FOR EVERYTHING, INCLUDING EMOTIONS
if you just look at it financially, it’s a great risk
if you add emotion and psychology to the calculation with a start balance of under $500 IT’S A CERTAINTY for a beginner
as a quick experiemnt
IF YOU HAVE EXPERIENCE (as i do)
can i start with $500 and bring it up to say $3,000
YES I CAN
but i have like 7 years or so expeience hehe
it’s a lot different
and even with me with a balance under $300 there is still a degree of risk and t times, i won’t be able to control it either
however,
chances are
because i disconnect emotionally
becasue i know what to look for
because i calculate risk
chances are i could probably make it without blowing the account
you see, i win around 17 out of 20 trades that i place
on a bad day i’ll win 14 out of 20 approx
when i was a beginner this ratio was more like
40 lossees out of 50 trades
or maybe 8 or 9 losses out of 10 trades
HOPE THAT HELPS EVERYONE
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You’re correct, but beginners are not experience and if the broker knows that the person’s account name does not show up in the brokerage and based on how the person speaks, the broker knows they are a beginner, the system is designed to take beginners for a ride to ruin until they learn or give up.
Not one bit. In fact it bored me to death after step 3. Have to go kill myself now!
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