How Much Cash Do I Truly Need To Start Trading Foreign exchange?

For today’s forex-related article, I want to address the question of what quantity of cash you want to successfully make a living from trading foreign exchange. This is patently not a simple subject to answer, and there is no hard and fast rule; but I can shed a little light on the subject.

If you had a big bank of, say, 100,000 GBP to trade with, then naturally with the correct trading technique and cashflow control talents, you might quite possibly make, say, 20% gains a year, and so make a pleasant tiny income of 20,000 GBP.However, if you just leap right in with your 100,000 GBP without any trade experience, then you might just as easily lose the lot!

I would suggest that, with no regard for what amount of cash you have available to trade with, you need to start with a demo account using virtual funds. Trade with this first and try to be worthwhile over 3 months or more (if your trading technique means you only take one or two trades a month, then you should probably do a longer test). Ensure you make 1 hundred trades before moving on to a live account so you know that your trading method is sound.

When you move on to a live account, fund it with 2000 GBP or thereabouts whatever you are able to afford “but not that much. Continue your trading method as before and attempt to be worthwhile for a few months. If you're not successful, go back to the drawing board and review your technique. If you are making consistent gains, then you can trade with a larger trading bank and start to make some real money. If you do not have any more funds to trade with, then just keep it tiny and slowly build up your bank till it is suitably big to begin to take an income out of it.

It might take years if you start with a tiny trading bank “but the principle is always the same whether you have 100,000 GBP or 2000 GBP in your trading bank “you have to make consistent profits. If you can’t do that on a practise account, then I advise that you leave your cash where it is.

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