Forex Capital – How Much Do You Need To Start Trading?

By Steven Hatzakis Friday, December 22, 2017

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Want to wade into one of the world’s most liquid markets – Forex? Wonder how much Forex capital is needed? Don’t procrastinate, your answer is here!

Before participating in the Forex market to increase your income, many beginners are curious about how money should they need to start trading. Well, this is a common concern so-called the Forex capital. If you’re looking for the answer to this question, our post can help you!

How Much Money Needed To Prepare Before Trading

Fee for Learning Trading

There are many methods for you to approach Forex trading such as taking a course, learning with mentors or studying by yourself. However, most of which will charge you a fee. It is a fact that doing everything on your own doesn’t bring more benefits or well teaches you than the others does.

Based on the program you take, the cost may range from hundreds to thousands of dollars. Nevertheless, all the information about Forex is free for whom are not willing to pay for the classes via websites, articles or forums.

Special Tools’ Payment

Forex traders need some special tools to get closer to the markets through charting software, hot news, etc. You can start paying nearly $100 per month for the advanced charting software. Immediate and precise hot news usually vary from a few hundred to thousands of dollars a month.

How Much Money Needed for Different Styles of Forex Trading 

Day Trade Forex

A minimum Forex capital with at least $2,000 account is recommended. The fact that a $5,000 account is preferable for everyone who wishes for a sufficient income. For instance, if you want to open an account with $3,000 and the risk is less than 1% on every trade, you can get a profit of more than $60 per day. Likewise, with the $5,000 account, you can receive over $100 per day with the risk up to $50 on each trade.

You are also allowed to create an account which costs less than $500, but you have to promise not to withdraw any money less than a year depositing. Maintaining this case and don’t let your account take risk more than 1% of each trade, your account will be worth thousands of dollars after that.
Do not ensure before trading your real money, a recommendation for you is competently practicing with your demo account.

Swing Trade Forex

Swing account is for someone who wants to use their free time to trade in FX market because they do not tend to always monitor their charts.
If you were those traders, you should have predicted the long-term moves and make sure that the market fluctuations wouldn’t encounter your safety or profit area. It means that you always set your profit level higher than the risk. Relying on your strategy and forex pair, you need to increase the distance between 20 and 100 pips on each trade.
Starting with a $5,000 account, you have chances to get about $100 to $120 a week. It is the same as a $10,000 account which can give you up to over $200 a week.

Longer-Term Forex Trades

With this style of Forex investing, the risk should be retained no more than 2%. For this reason, I suggest that you ought to raise the capital about $4,000. I expect that you can make a stop loss about 300 and 500 pips from the beginning, but after a few months, you need to increase to 1500 pips, for instance. Your income potential is also influenced by the starting balance.

How Much to Risk in Forex Trading

Many experts said that never taking risk exceeds 1% of your account per trade. For example, you deposit is $100, and the risk is only 1% on each trade. This insinuates that a pip’s value is around 10 cents.

You trade Forex with a small capital, you will turn into a Day Forex Trader whether you like it or not. Hence, opening a $100 account and following 1% of risk, you just risk 10 pips. However, with 10-pip stop, it is not enough for you to choose swing trade style or the others. Moreover, $500 is also a sensible threshold for whom want to start with a very small amount of money and grow slowly.

Final Thoughts

As I recommend above, $1,000 is a suitable Forex Capital for new traders who want to start trading no matter what the style is. If you desire to gain much money, let’s deposit as I mentioned before. That is $3,000 for day investing and $4,000 for swing trading. Most people taking risk more than 2% suffer losses or become unsuccessful traders. One more notice is that the average profit should be greater or equal to 1.5 times the risk.

However, everything is only an estimation, succeeding or not still depends on your own strategy, plan, attitude and also the way you practice with a demo account.
Thank you for reading!