I’ve been studying the first chapters of the School at babypips.com and it’s looking really interesting. However, I’m wondering about how much money I would have to invest to start trading when I’m confident with the demo account.
I know that in the school they mention that it’s nonsense to open an account with 50$ even if the different brokers allow you to and why we shouldn’t do that.
So, my question is… what’s the minimum and reasonable amount to start trading for real? I would like to start with the minimum amount, but in order to have a good margin to play around with.
Every person chooses his strategy and risk tolerance themselves. I risk 0.5 to 1% per trade. Min amount should be at least 1000$ . Because if you trade 10 to 100$ then you will probably lose it all. (You want to make a lot of cash) If you start then at the beginning you can try with 50$ or less.
You can opt to start with a nano/micro account, with $100 but make sure you understand leverage, margin and margin calls since these issues will crop up often with small accounts…
FXsmall is very correct, the most important thing to be conscious of is your lots size. Don’t risk more than 2% in all open trades, calculate your risk to accommodate the amount($) you are comfortable risking.
for example you spot a sell entry signal, all you have to do is to calculate the amount of pips from the last swing high to entry point. once this is established, you now break down the amount of pips you are risking into 2% of your account/margin and then enter at market. If you trade more than one pair then you can enter the trade with 1% and reserve the other 1% for another opportunity
for example+= $500 margin, stop loss=50 pips, willing to risk 1% on the trade which is $5.
i.e 50 pips to share $5 amongst them = 10 cents per pip
therefore your lots size will be 0.10
I don’t know if you get me, i’m just trying to explain to you like a lay man who is also learning
go with 500$ account
set a stop lost limit for each trade
maximum lost per trade should be around 2%
2% of 500$= 10$
if you make a trade of 1 micro lot (1000$), you can lose 100 pips = 10$ before you get stop lossed
or if you trade
2micros = 50 pips
3 micros = 33 pips
you get the point
i think 500$ gives you enough room to play with
your point having a 500$ account isn’t to make money but to stay alive and survive with it
if you can survive for a year, you can deposit more money to make more money then!
For newbies, the smaller the better because the likelihood is that you will lose all of it. It’s what you learn from losing and how you bounce back from it that determines your next step up (a very very uphill road to success might I add)
LOL…yap, I’ve seen this before. Maybe BP school can put that into one of the materials…
oh wait…I think they did…10K starting?
On a serious note, “reasonable account size” is depend on the person. If you can blown up $1000 and still can make your bills paid then it is good. If not, then reduce it to any amount you’d like. Ít’s up to you.
Im going live after new years eve, and I am going for the smallest possible amount where I can manage my trade correctly(1-2% max), so Im going for a micro acount with 500$ Good luck!
PS. And then, if everything works good, Ill reconsider my account balance in the summer
Come on, newbies rarely have reasonable expectations - none of us did when we got into the market as a newbie so it is really hard to gripe about the fact they do not either. But all said, all the comments point the obvious - start small, do a demo first, start with a nano/micro account and read, read and read…
Sorry, would really have to disagree with the $1000 min, why on earth would a newbie want to risk that right away? It makes more sense to take baby steps, make some profits and then top up the account later on. Start micro with $100 or less but make sure you understand margin, margin calls, leverage etc.
What do you think is the smallest amount tradable if your going to ttade a 50 pip stop risking a max of 0.5 percent? For example a 500$ that would be 2.5$ / 50pips, about 5¢ pr pip, does anyone know of a broker that allows this?
I plan to trade using 1-2%, but want to be able to scale out of a position…
[EDIT]
Seems like the smallest position size at the popular brokers are 1000 units, and with a 50 pip stop, that would be 10cents per pip… Im still going with 500$, but I can’t open positions of less than 1% with a 50 pip stop…
Better to open ten times a new account with $100 than to loose $1000 in one go.
And you will probably start trading mini-lots anyway, so why having 90% of your money doing nothing on your account, where you can put it in a savings account until needed?
$200 is good enough… Forget the 2% rule because it will take you years before you are where you want to be. The risk is greater that you give up along the way than continue till the end. Even better: 2 accounts, one for a higher percentage to keep the adrenaline going and the other for the 2% rule as a backup.
And don’t tell me (not you FXMall, the others. I just used your post to reply.) that you want to start to trade lots right away. Perhaps your first two trades, after that you will scale down if you haven’t experienced live trading yet.
Anyone got news about the world’s end? Nothing happening here at the moment.
That’s okay - no prbs just laughed out loud when I saw the $1000 pointer for beginners - believe me, there are newbies who post $1000 and more into their accounts, only to lose it all within 3-4 days. Ever wonder why the big brokers are so obliging to newbies…here’s why.
And on the end of the world, so much for all that hype - guess the tourists who made the trip all the way to Guatemala are feeling a bit stupid right about now…
Whatever money you start with, say goodbye to it, so, it does not matter if it’s 100 usd or a million, it will vanish very quickly, so, start with little as possible.
Good luck!