Starting capital for Forex
One of the most important aspects of working on Forex is the size of the starting capital; the amount of earnings and the degree of risk when trading directly depends on this factor.
Many novice traders ask the question - How much can you earn by trading currencies? The answer to this question directly depends on the size of your deposit and the leverage with which you are trading.
Forex starting capital is the amount of funds that you deposit as a trader's deposit for further use in trading on the currency exchange.
Some brokers have requirements for the minimum amount of starting capital (deposit); this indicator can range from 1 to 2000 US dollars.
First of all, it should be noted that at the moment you can start real trading with literally 1 dollar, but in this case you will also earn a few cents a day.
Therefore, it is advisable to use the maximum possible starting capital, which will allow you to trade with less leverage, thereby minimizing the risk of trading.
Before you start trading, you should determine how much money you need to earn a decent income. Statistics from professional traders can help, showing that the average profit on the forex market is around 20% per month.
That is, with $1,000, you can earn $200. Based on this, we can say that the recommended deposit amount for Forex trading is between $3,000 and $5,000; with this amount, you can already feel comfortable on the currency exchange.
Using high leverage can significantly increase profits; most traders trade with leverage of 1:50 or 1:100.
Increasing leverage will lead to larger trade volumes, and therefore higher profits. However, it's important to remember that this significantly increases trading risk and reduces the range of available time frames.
If you use a leverage of 1:500, then at best you will be able to open trades lasting no more than a few hours, and even less in highly volatile markets.
But if there is no other way out, this approach gives you the chance to earn decent money with just a couple of hundred dollars.
All that remains is to find a place where you can get that very starting capital for Forex; there are several options for solving this problem.
Sources of start-up capital for Forex
Each option has its strengths and weaknesses, but the key is to ensure that the effectiveness of its use outweighs the cost of receiving the money.
Equity – this one is straightforward: you have money, deposit it, and start trading. But don't forget about the interesting factor of missed opportunities, such as how much money you could have made if you'd deposited the same amount.
Cash loan - considering that you can currently get a loan for less than 7% per annum, this option also has a right to exist.
You take out a $1,000 loan and try to make your profits cover the monthly loan payments. This option should be used with caution and only if you are completely confident in your abilities.
No-deposit bonuses are the easiest and safest way to obtain initial capital for trading. If you lose your deposit, you bear no liability, and if your trade is successful, all profits remain yours.
It should be noted, however, that this option is more suitable for training than for earning money, since bonus amounts rarely exceed several tens of dollars.
For example, the maximum no-deposit bonus offered by the RoboForex broker is $30 for new clients.
Demo account contests – you can earn up to $1,000 without having a penny of your own money, but you'll have to try, as there are plenty of people like you who want to take part.
In conclusion, I would like to say that, as practice shows, the most important thing when trading on the Forex exchange is not the size of your starting capital, but your trading skills.
If you become a true professional, you'll be able to manage other people's money, and there will be no shortage of people willing to entrust you with their trust management; some managers have hundreds of millions of dollars at their disposal.
You can find out how to become a manager and what is required for this from the article at the address - http://time-forex.com/pamm/pamm-upravlyushiy
