If you’re going to become a forex trader, one thing’s for sure: you’re going to have to make an investment. You can’t trade without any funds in your trading account, obviously, and many brokerages don’t even offer accounts for less than $500. While many beginners dream of opening a trading account, the thought of investing such a large amount of money into something that may not be profitable is scary. After all, you can do a lot more with that money. Others simply don’t have that much in disposable funds, so trading seems impossible. The good news is that it is possible to open a trading account and to be successful with a small starting deposit of about $100. Some brokers will even let you get started with around $5 or even $1, but it is best to make a slightly larger investment if you can.
Before you make the decision to start, you’ll want to have realistic expectations. It is highly unlikely that your $100 investment will turn into thousands of dollars quickly. You aren’t going to make the same profits as someone that has invested $20,000 into their account. Beginners need to ease into the market. If you lose your entire investment, it doesn’t mean you should quit. Instead, you need to look more into education and base your trades on more evidence.
Indicators, economic calendars, charts, graphs, and so on can give you more information from a technical and fundamental standpoint. The good thing is that if you lose your $100 investment, it won’t break you, and you can start again. Losing a larger amount of money could scare someone away from trading for good. If you find that you’re well-prepared and you start making money, you could always invest more later.
Here are a few quick tips for opening a trading account and getting started with around $100:
-Try to find a broker that offers some type of bonus. Some even offer $30 welcome bonuses or simple deposit bonuses that would add to what you’re investing. Just make sure that your deposit is large enough to qualify.
-Make sure you sign up with a broker that offers good conditions. You should have access to average spreads and fees with a $100 deposit. Don’t open an account with insane fees just because it is the only option with a certain broker. Look for better options and compare what you can get for what you have.
-Don’t use too high of a leverage! This is important because overleveraging your trades can cause you to lose a lot. Many beginners use too high of a leverage to increase their investment power, but this usually backfires. Start smaller and work your way up over time.
-Never risk much on any one trade. Many professionals recommend risking 1% or less of your total account balance on a single trade. This might lead to slower profits, but it is safer. If you go risking 10% on one trade, 20% on another, and so on, you could quickly blow your account.
Once you get started, you should focus more on trading and less on how much you’re making. Opening a trading account with a small amount of money isn’t going to make you rich overnight. It’s going to take a lot of hard work and dedication before you get there. You can plant the flower by opening a trading account, but you need to water it by doing research, getting an education, taking risk-management precautions, and keeping a trading journal to log your progress. You’ll also need to treat your small account the same way you would a large one. You might not feel as worried about losing $1 compared to how you’d feel if $100 was on the line, but it still matters. Understand that it is normal to lose some money, but every dollar lost adds up.
In conclusion, you should be aware that opening a trading account with as little as $100 (or less) is possible and it can be profitable. If you have realistic expectations, you can be successful with an account that has a low initial investment. Remember some of our tips about finding a good broker that offers bonuses and using risk-management precautions so that you can make the most out of your account. Don’t get discouraged if you’re only making a small amount at first. Every trader must start somewhere, and seeing profits is much better than seeing losses! If you manage to increase your account balance by even a few dollars, then you’re doing better than many others that have tried. As you work your way up, you’ll likely gain access to better accounts and have more money to invest, which will help to grow your account more quickly in the future.