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What is the Minimum Capital required to Trade Forex? - Forex Function

What is the Minimum Capital required to Trade Forex?

Last Update: 17 December,2016
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For Trading Forex, How much minimum funds are required?

Let’s first understand when we should think about this question. Before reaching this question, there are many things, which a new trader should go through, first of all, let me congratulate you that you have made a good decision of trading forex as this is “The Best Speculative Trading Market” according to me.

Trading forex directly with real hard earned money is not at all advisable. The very first thing, which a new trader should do, is to learn forex trading by some books, videos, trading classes, webinars and/or mentors. Many of these forex education materials are easily available online. For those who are not interested in purchasing anything and/or the traders who are reading this can learn forex trading online for free of cost by carefully reading this entire educational series and also regularly visiting the forex trading blog.

Second step while going through this free forex trading educational series is to open a forex demo account with any of the preferred forex brokers. The reason for opening a forex demo account is that you will be able to experience the real live forex market and can study the charting and forex trading strategies. Being a new trader, you will naturally have many questions, as, so it is very essential to get familiar with forex market through this demo forex trading account. You will be able to make stimulated trades in the real market conditions and experience the broker’s facilities like live news, customized technical indicators, forex calculators and many more.

Once you are comfortable with the live forex market conditions and have successfully made profits in your forex demo account for a minimum of 3 months, only after that you are ready to trade with the real hard earned money. Only to erase your curiosity, I am answering you the real answer for the question asked below

For Trading Forex, How Much Money do I need?

Forex Trading is very flexible in terms of initial investment. A trader can start trading forex with any desired amount. Many forex brokers give the facility to open a live forex trading account with as low as $100 (It is not that I am suggesting to open a live forex trading account with such low capital, but it is just that, it’s possible).

In order to earn money consistently from forex trading, a trader should be well capitalized. The reason for this is if a trader is under capitalized; he uses more leverage, which results into the higher possibility of profit and loss, but as a trader is not aware of this, once he faces a huge loss with a less initial capital, it becomes very difficult to trade again with the same volume, but if a trader trades with proper capitalization, risk management and money management he is always available in the forex trading game.

Many forex broker offers leverage ranging from 100:1 until 500:1, but it is advisable to use a maximum of 10:1 leverage. Managing Risk and Capital is much more important than earning because if we have the capital and are properly following the risk management, we can always trade and earn consistent money.

You can open a Micro lot trading account with the initial capital of $500.
You should open a Mini lot trading account with the initial capital of above $500 and up to $5,000.
A Standard Account is the preferred choice with the initial capital of above $5,000.
Suggested risk per trade is less than 2% of the trading capital. Risking more than 2% in a single trade is very aggressive, which can create a fortune for you or wipe you out with a losing streak

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