It is not necessary to have several thousand dollars to invest in Forex. One can very well embark on the trading journey and start an independent trader career with the minimum deposit required by Forex brokers which is usually around $200.
$1,000, $10,000 or $100,000?
In fact, trading with the minimum deposit of $200 when opening an account will be exactly the same as with an account of $10,000, $20,000 or more. It only differs from a technical point of view (because obviously, psychologically, trading with millions or with an account of a few hundred bucks is not the same). Regarding the technical aspect, a small or a large deposit of money will not change the strategies much. The only thing that will change is most likely your lot size, since if you risk 1% on an account of $200 (or $2) or 1% on an account of $20.000 (or $200) then the size the position will not be the same. Note that regarding the trading strategy, there will be no difference for most traders. You can obviously trade with several thousand do;llars but the goal of the particular trader who starts is to grow its capital and build a more important one through the profits generated.
Manage your Risk – Forex Trading Upgraded
This brings us to talk about money management. Regardless of the size of the capital you have for trading, it is absolutely necessary to adhere to a risk management strategy and not risk more than x% of your capital per transaction. Generally 1% risk per trade is recommended, but some traders will even risk 2% per trade. Risk management seems simple and yet this is the big problem for individual traders. It is sometimes difficult for traders to stay in control of themselves and their trading and not to invest more than they should. However by making this mistake and deviating from money management best practices, the chances of success of traders decreases sharply.
Maximize your Chances of Success
To maximize your chances of success, you can obviously apply the advice given in trading courses, but also start by reproducing a trading strategy that already works for some traders (for example the strategy of breaking range, the strategy of points pivots or the ichimoku strategy). I’is also quite possible to copy traders’ investments through social trading.
Trading with an Authorized Forex Broker
Finally, whatever the capital you put into Forex trading and no matter what trading strategy you use, you must absolutely use the trading platform of an authorized forex broker. Etoro is a good example of a broker to turn to, but there are many other large such platforms.
But you may be wondering what are some of the most common and rewarding strategies to use. So here are 4 of the best:
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The Forex Scalping
Very similar to Day Trading, the strategy of Forex Scalping is based on the same general operation: to carry out very short operations, in the direction of the trend, by taking many but extremely small gains.
Here, the amount of the investment must be enough to ensure the gains. And again, we must use a significant leverage, and therefore act carefully, including cutting the earnings at the right time.
Counter Trend Trading
As the name implies, this trading refers to taking positions opposed to the trend of an asset. Most often, it is to capture movements of corrections, a retracement of the trend movement. More rarely, we can take advantage of a turnaround, and capture a large part of the movement.
To keep in mind: for this type of trading, it is essential to have a strategy that is consistent with your psychology.
Simple Trading With Obliques
Ultra simple trading strategy, trading with obliques does not require any technical knowledge. It is a mix between non-aggressive Scalping and aggressive Trading Swing.
This consists of simply drawing bullish and short-term bearish slants and then trading the oblique breaks to enter or exit position. Stops are usually placed above the last higher or lower. If the last highs or lows are too far, we can stop the session.
It’s a strategy of maximizing your earnings, strengthening your position, as long as the market is right. The winnings are protected by a stop movement as the movement progresses.