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How much do I have to invest to start trading on Forex?

How much do I have to invest to start trading on Forex?

Year after year Forex trading becomes more and more popular among people who wish to get some additional income without any effort. But there is still one important question they ask every time: what is the minimum Forex deposit required to start working?

Usually, many beginners go to the Internet and try to find some information about the right way to trade, how much money they need to start trading and which Forex broker is better to choose. During their searching activity they realize that that trading is carried out with lots, and the minimum lot is 100 000 base currency units. In other words, if you want to buy 1 lot of the popular EUR/USD currency pair, you must pretty large amount of money. But very often beginning traders don’t have such a big sum to invest.

Minimum deposit on Forex

During their trading activity traders use margin lending (leverage) which enables them to make their trading profitable without having large amounts of money on their account. But the dark side of this is that experienced traders almost don’t use high leverages in their trading process – this trading style implies sound financial management, and beginners cannot boast off such skills. In order to let newcomers know how to make money on Forex, brokerage companies now give them a possibility to trade with odd lots – in other words, to open orders from 0.01 of lot. Brokers and ECN-companies in particular, for example FxPro, try to avoid any restrictions concerning the size of the minimum deposit. Very often, brokers allow their users to trade on Forex with only 1 US dollar. Minimal Forex account is a cent-account, which is the most suited for newcomer, because when trading with cents trader minimizes his/her risks and obtain necessary trading experience.

How much money is needed to trade on Forex?

It is unnecessary for a beginner to spend any amount of money during the first few months. He/she should in no way start real Forex trading without a bit of practice on a demo-account. Almost every brokerage company provides a demo-account, and such demo-trading is very essential for all beginners. Demo-trading will not bring any income, but it will become a valuable experience and most importantly – totally free.

If you search in the Internet you will see that today many brokers offer 1-dollar deposit, (it is possible to check this in the Compare Brokers section) but such advantage as small deposit has one significant weakness: it is hard to learn how to control money, especially since it is so easy to waste this deposit.

The optimal deposit size for a newcomer is equal to USD 100. One the one hand, it is not something critical to waste this amount. And on the other hand, traders get a possibility to work with microlots (0.01 from a standard lot). And furthermore, traders are free to work under any existing trading strategy.

It’s better for beginners to hold off on depositing their trading accounts with more than USD 100. Even if you feel self-confident about your skills, you shouldn’t give way to a hazard, because there is still quite a large possibility to waste all your money. Working on demo or cent-accounts, any beginner will be able to deal with a trading terminal functionality, get clear understanding of all trading basics, obtain certain trading skills and learn how not to go into the red during the trading process. Aside from that, you can also receive some small virtual income.

Only after this stage you can start investing amounts equal to thousands US dollars. When all Forex trading basics are clear, every trader decides what amount he/she is ready to allocate for these purposes. According to the experienced trades, you must be ready to put at least one thousand dollars to obtain high profits in future. Together with the successful trading strategy such deposit will bring you very high profits.

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