Capitalization

To be successful in trading you need to start with a base amount of capital. One of the main reasons for this is that like stocks, trading in forex does not always have a win situation. There are times when you have to weather a bad streak of losses before hitting the high pips. You also want to have enough money left should you lose some money in the beginning. Forex trading is like any other business. You need money to make money.

Another important aspect of forex trading is to have realistic goals. Sure there are traders who double and triple their money. They have $100,000 or more under management and more importantly many years of trading experience.

Ok so the important question is how much money you need before jumping into a live account and actual trading. The real answer is it depends. There are brokers who offer accounts as low as $25, but don't jump into it.

Well, if you are planning to use forex trading as a daily wage earner, you need at least $10,000 dollar or more. But as an alternate source of income you can start with $1000 or less. Now, many websites say that you can make money with just $25 while others say you need $10,000 or more. Well with $25 you are most likely to lose (because of the high leverage), but can still use it as a means to learn with real market experience.

So here is the run down on which type of account you should open depending on how much money you want to put in forex.

$100,000 – Open a standard account
$10,000 – Open a mini account
$500 to $1,000 – Open a micro account
$500– Open demo account

Learn well and practice with a demo account before risking real money.

Forex Educational Articles & News

Featured
Top 5 factors that affect exchange rates ...

There are many factors that affect exchange rates of currencies. However some are more important in currency trading than others. These are; Interest and Inflation rates, Trade balance, Currency market speculation, Foreign investment and Central bank market intervention. Learn how to use these factors in your forex tra ...

Forex Navigation