In my post on how much money do you need to start forex trading, I said that a straightforward answer is a minimum of 6 figures up, $100,000 USD in trading capital. Most will tell you different and yes you can indeed start trading with less than $100 dollars. It also depends on the trader’s individual circumstances itself. In an ideal world we’d start off with $100, turn that into $1 million and keep the good times rolling, a possible feat albeit s a very rare story.
I say $100,000 because you want to give yourself as much edge as possible when you trade. You want to remove as much pressure as possible of making money in the markets. This is a tough game already, and you want to stack the odds in your favour.
Answer the following questions:
How much do you want from the markets? $10,000, $20,000, $50,000, $100,000?
What percent return do you think is possible?
How much money do you need for the lifestyle you desire?
Let’s do a quick calculation on percent returns and value returned based on a trading account of $100,000 USD vs at $10,000 USD.
- $100,000 with 10% return = $10,000 USD
- $100,000 with 20% return = $20,000 USD
- $100,000 with 50% return = $50,000 USD
- $100,000 with 100% return = $100,000 USD
Even if you do 1% on your trading capital of $100,000, that’s $1,000.
If you started with $10,000 with those returns:
- $10,000 with 10% return = $1,000 USD
- $10,000 with 20% return = $2,000 USD
- $10,000 with 50% return = $5,000 USD
- $10,000 with 100% return = $10,000 USD
Which of the trading capitals do you think would be more pleasant to live on? And which results are more consistently feasible to achieve?
There are traders out there who make bank day in day out and they trade with at least 6 figures up. You want to be in that category. Your goal should be to build up to be on that level.
I would also like to add that you don’t want to trade with ‘scared’ money. Your trading capital should have less emotional ties as possible. The goal is to make money and you don’t want to have added pressure that the trading capital is all the money you have left and you have bills, a mortgage and a family to feed or knowing that the trading capital is from a bank loan or from a friend.
Here’s to successful trading,