Starting Forex Trading with just $1000
Common wisdom says that to become a professional Forex trader you should have at least $100,000 in your account. To those just getting started in the field, that can seem pretty intimidating. On the other hand, many trading advisors recommend new traders stay away from those little $100 or even $500 mini accounts because they just don\'t allow you to trade seriously.
With these factors in mind, many novice Forex traders usually begin trading with just $1000. This puts them into a zone with they are comfortable with if they loses this amount of money. The truth is this amount is actually hardly sufficient to begin serious Forex trading with. And another factor that might make this situation worse is that likelihood that this amount could be ill afford by the novice Forex traders. And if such is the case, they will constantly worry about losing this money and let their hearts rule their mind. Despite pointing this out, you can still begin trading with just $1000 if you follow some tips which this article will show you.
1. Begin your trading with a Mini account
Although it is true that trading with a mini account will not be like trading with a full fledged account, by doing so you will not be worried about risking a big amount of money. With that, you will be able to concentrate better and make better investment decision. If you have to constantly worry about what little money you have, you risk let your emotions dictated how and when to invest and this will ultimately result in losses. So just begin with a Mini account to get rid of all these distractions in the first place.
2. Having a realistic stance towards managing your risk
The ability to manage risk and minimize costs are vital in Forex trading, but many traders with limited capital go overboard and try to minimize risk to a point that\'s just not realistic. Doing this is nothing more than a waste of time. Instead of constantly searching for ways to eliminate risk, use the intelligent risk management strategies larger traders\' use and put your effort into growing your account instead.
3. Develop your portfolio
After awhile if you are when you keep making profitable trades, your mini account will sooner or later grow in size. With that, you will also be able to build up your portfolio. Many novice traders do not do well in this respect because they let their fear of losing their money hold them back. But if you do not take risks, you will not be able to grow your account. The best approach is strike a balance between cautious and risk taking.
4. Using Leverage
Generally speaking, when you\'re working with limited capital, you\'ll want to take advantage of high leverage. Just keep in mind that higher leverage comes with higher risk of loss. If you\'re going to be using high leverage, stick with a fairly stable currency pair to keep risk down.
One of the worst and most frequent mistake Forex traders make is trying to trade without sufficient capital. While it is possible to start out in Forex with $1000, you need to be realistic about what you can do with that money and continually work on building up your account so that you\'re not longer stuck working with limited capital.