It depends upon your trading and money management skills.
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Generally trading is business. To get out alive you need to have healthy balance between income, cost and risk. You can ride a Ferrari right after getting drivers license and survive, but chances are you end up wrapped around the tree next to your garage. Until you have a solid method of taking money from forex you should reduce the cost of making mistakes. I repeat that often - If you want to learn from mistakes, ensure these are cheap ones.
If you are a person strong enough mentally (I am not that kind of person) you can trade demo account in the same way you would trade real one. It’s the by far the cheapest way to learn trading (zero cost). However, based on observations, people tend to treat demo account as, well, demo account 
Most people would learn best, using small account. By small I mean one to allow you risk small percentage of capital in one trade. For scalping small account may be even few $, if you trade from daily chart, ranges are larger and your risk (and minimal account size) need to incorporate this.
Small account can be funded even by introducing some savings in day to day shopping, having some other investment vehicles or selling your old stuff etc. Go buy that milk in special offer few times and you will save for one free trade
Starting trading with larger accounts (in forex) from my experience is just painful. Each loss is quite hard to swallow and can build up negative defense mechanisms. Avoiding trading, overtrading, changing strategies etc. It is very hard to come up with your way of trading without losing A LOT of trades.
I’ve started with medium account on stocks years ago. It was a bumpy road and managed to go flat. After a break I’ve started forex account with Oanda which then allowed trading with units and small leverage. This was great as given the feeling of real money, but still the risk per trade was cheaper than box of matches
You can double or triple the demo or small account, but think twice before getting larger account. Feeling of little to lose is a straight way to overtrade, risk too much and feel overconfident. This may give impressive results, but I don’t believe these would be replicable and consistent year after year.
“I can double my account in one year”
“OK, so sell your house and double it”
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Real money experience is important
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Yes but if you’re making a decent yearly return percentagewise this will fortify your belief in yourself to continue adding to your account on a monthly basis for compound growth
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At Least we can learn without worrying about high capital loss. Imagine working on a huge account and losing it all because you were not good at your analysis. I agree that we all want to make money but I believe in sharpening my axe for a longer period before actually cutting the tree.
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It depends.
I do really think that it is better to learn trading forex on real account and it is better to hedge the risks in order to eliminate the probability of blowing a huge account within a single trade. Surely, it is not a good idea to keep on trading microlots for too long and it is better to expand your trading budget on a regular basis. It is just like trading with demo. It is suitable to trade demo money for about a couple of moths, but there are traders who trade on demo for ages and they got used to it so much that they are afraid of switching to the real account. It is always important to find a golden mean.
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What is bad about taking a $300 account and making it into a $400 account? Or $500? Or $600.
If you can do this, do it. If you can’t trade profitably from $300, you probably won’t be able to trade profitably from $3000 anyway.
Its similar to being an inexperienced and short-sighted car driver on an unknown road at night. Driving a bigger car won’t make you a better driver.
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Agreed with you on this. If you can turn your small account into some profitable amount, then you are off to the great start.
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It is possible to make money with a small account. It’s just that it will take a significant amount of time. If you have that time to give in, there’s no better way to develop your knowledge and hone your trading skills than trading on a small account.
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Agreed!
Trading on small accounts give the opportunity to learn and earn both.
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I totally agree with the idea that trading small account will only demotivate you.
It can be good to trade microlots persuing educational purposes. I also think that it is better to learn to trade real money instead of trading demo for too long. However, when you become more and more experienced and skillfull, you’ve got to expand your trading budget, otherwise you’ll just simply lose any interest in this activity and give it up. It is of vital importance to keep on growing, however, you cannot grow as a professional trader if your budget doesn’t grow. It should expand hand in hand with your skills and knowledge and that is the only way for you to keep motivated and carried away by trading.
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Trading small accounts brings about lots of fuss and small profits.
I wouldn’t say that trading microlots is an ultimately useless thing. I mean that I used to trade small amount of money in order to learn how to trade. Such an approach made me understand what trading is all about and whether it is suitable for me. I share the idea that it is next to impossible to learn to trade on demo account. There are so many different factors which demo accounts really miss such as psychological factor, slippages and spreads and so on. That is why it is much more efficient to learn trading from investing real money into it. Surely, it was too scary for me to deposit all of my savings into it right away, which is why I started with trading microlots.
However, I do support the idea which was expressed in this post that trading small accounts doesn’t really make sense. You’ve got either to take huge risks in order to get some tangible profits, or you’ve got to follow money and risk management and get ultra small profits.
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In a nutshell, you are right on the note that trading with a small account is not worth it. However, I do completely agree with all your statements. Trading on a small account does not mean one has to take more risk. It is to be 2%-5% per trade. Thus, if someone trades with a small account, his profit would not be an amount that he can meet his expenses. Last but not the least, a trader must be consistent and skilled if he wants to deal an account with decent amount of investment.
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I am currently in a small account challenge and I agree with this. The level of stress is very very different. Cause of this account, I start to doubt to enter trades that usually give me big wins.
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I also started from 100 USD and then gradually increased my equity as I saw progress. I never used leverage more than 1:100 to avoid unnecessary risks
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Trading small accounts is for learning. You are not going to make 100k on a 1k account just won’t happen. But if you open a 1k account and at the end of the year you are up 10 percent, you are possibly ready to move up to 5k, rinse and repeat until you are moving a yard per month, you will be rich just Like Mike
The Ever Attentive VIPER
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I think as a new trader, we should start with a small account.
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Honestly speaking the account size doesn’t really matter instead your focus should be on on establishing consistency and a trading system that works.
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Trade only amount that you afford to lose. When for minimum 6 months small account will be profitable, then it is worth of upgrading it to bigger, else loosing less is less painful than loosing big.
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Trading small amount is really worth when you’re new to forex. I always say to a newbie rather to go demo or start from small amount till you not become confident.
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