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.
Bearing in mind what these people asides, many novice traders instead set aside $1000, to start their trading activities which gives them a comfort zone. In actual fact, this amount is hardly sufficient for you to begin serious trading. And to compound the problem, if this amount that you invested is not really invest capital that you can afford to lose, then your emotions will hold you back. This is because you will keep worrying about losing your money. Having said so, it is still possible to begin trading with an initial amount of just $1000. Here we will show you some tips how to go about that.
1. Considering a Mini account
Of course trading with a mini account is not like trading with a full account but this will gives you the peace of mind of losing your money. When you have the peace of mind, you will stand to make better investment decisions. Otherwise the constant worry of losing your investment capital will cloud your mind to make objective decisions regarding Forex trading and this will lead to losses in the end when bad trades occurs.
2. Managing your risk realistically
The need to minimize cost and manage risks cannot be overstated in Forex trading. But many of those with limited capital tend to overdo it until to the point of being unrealistic about the whole situation. All these efforts will amount to nothing but just a waste of time. Rather than focusing in this manner, use the time available to learn how to use intelligent risk management strategies like the professional traders on your mini account.
3. Building up your Portfolio.
Remember, if you do things right, you won't always have "limited capital." Through consistent, accurate trading you'll be able to build up your account to a good, healthy amount. One of the biggest factors that holds beginning traders back from growing their Forex trading portfolio is a fear of taking risks. That's not to say you need to go out on a limb with every trade, but don't get so timid that you're not willing to push yourself beyond your comfort zone now and then.
4. Leveraging your trading
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.
Because most new Forex traders prefer to err on the side of cautious, they made the mistake of beginning trading with inadequate investment capital. While it's possible to trade with an initial capital of $1000, bear in mind that this should just be a temporary situation and that you should built up that amount to a more sizable amount over a period of time.
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