What is the minimum I can invest?

Beginner Questions
1

if I have a balance of 500 $ can I open a position with only 50 $ ?

2

read this:

Forex Money Management: Rules for Managing Your Forex Trading Money

And this:

The Number One Reason Why Traders Fail in the Forex Currency Market

General rule of thumb is 2% of your account per trade

3

So if I have a micro account with 1000 $ I have to invest 2 % ,
that is 20$?

4

Your maximum risk ie. stop loss should be no more than this

5

With a 2% money managment rule yes.

For each trade work out the pip value and multiply that by the amount of pips risked in your stop loss. So if your stop is 50 pips away from the price and each pip is $0.10 then your risk is $0.10 x 50 = $5.00 which is 0.5%

I use a risk/reward ration of 2:1 as well so if I’m risking 100 pips then I want my profit target to be at least 200 pips

When starting out it’s also recommended to just risk 1% per trade.

6

Your risk appetite should be reflected in your max possible loss. As others have mentioned, a maximum 2% risk on any individual trade is popular. Some people prefer to carry less at 1% risk or lower and others prefer to carry more, at 3-4%. It’s really up to you as a person and the types of trades you make.

7

If your 2% risk = 20$ then sl = 20$ . if sl = 50 pips then 20/50 = $0.4 trade

8

Yeah I know :stuck_out_tongue: hence the bit that says

then your risk is $0.10 x 50 = $5.00 which is [B]0.5%[/B]

Also not all pips are created equal, some are $0.07, some are $0.09, some $0.10 and some $0.16

9

Yep, which is why you need to be extra careful with pairs that don’t have a quote currency that is the same as your deposit currency. Always good to use a pip calculator for those.

10

($0.10 x 4 ) x 50 = $20 which is 2%

11

Your example is less confusing :smiley:

12

I risk 1% and I think if you have about 20k or 50k it’s pretty painful for a newbie to have a loss streak of 5 trades of $1000 each if you’re risking 2% for example on a 50k account.

13

It is recommended that you invest $1000 at least. You can find why in the School of pipsology in thus site. That’s the place where you can find all the things you need to know about forex trading.