How to Trade Forex with $100

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How to trade forex with just $100 as a starting point?

How to start trading with small initial capital?

How much money do I need to start trading forex?

How long do I have to wait before I start making a decent amount of money from initially trading forex with $100?

These are just a few examples of the questions strolling your mind if you’re to consider trading forex as a newbie.

Especially if you’re considering to trade forex with $100, £100 or an initial capital that you assume to be small.

To be honest you should only be considering trading forex with a small amount of capital if you’re not familiar with the forex market.

Too many people believe that trading in the foreign exchange market requires you to start with a considerable initial amount of money at your disposal or to be already pretty wealthy. 

If you are new to the forex market you can expect at least a dozen sources to bombard you with recommendations and suggestions on how to build considerable forex wealth at a rapid pace and with a low amount of money.

One of the most popular and controversial theories in the field suggests that you can initially invest just $100 in entering the forex market and you can quickly grow to as much as $10,000 or even a million in a short period of time.

Whether or not this can happen is a subject of an endless list of factors but it’s extremely unlikely. We will try to dig a little deeper and discuss the possibilities of such claims being possible or impossible and whether or not forex beginners can stand a chance of a great return or whether they will most likely lose their initial capital.

See also: How to Stop Being a Forex Trading Noob

Despite the fact that many people do believe that a large amount of money at disposal is much needed for starting trading with forex, there are also many forex beginners coming into the forex market with relatively small trading accounts of just $100, £100 or similar amounts.

However, one of the main fundaments of forex you are about to learn when entering the foreign exchange market is that the size of your account is not the most important thing in this initial stage.

Learning is what matters the most in order to benefit from the potential chance to earn money from trading forex. Hands down, you will soon find out that it is easier said than done and it takes a lot of patience and discipline to be able to witness the progress of your account.

Discipline, patience, along with other characteristics and skills valued in the forex realm are just a few of the fundaments you will be able to learn and train yourself into with the right educational background.

If you’re looking for some great options for a forex trading education make sure you check out Trading Education’s Free forex trading course

 

Let’s continue on the point of the size of your forex trading account not being that important. Even if you decide to trade forex with $100 you can definitely do so! The size of your account just provides you with different possibilities which makes it just a function to achieving success but also experiencing failure. Both success and failure can happen to accounts worth millions of pounds or dollars too.

 

How is it possible to make money with a low amount of money?

So let’s assume that we all live in a perfect world and all the flashy forex trading advertisements are without a doubt going to change your life. You want to start your “home business”, you want to trade forex with $100 at first and soon be able to make a decent monthly profit, you want to be this regular person succeeding on the road to the riches fast and easily.

Speaking hypothetically, all this can eventually happen with the help of forex trading. Thanks to the high leverage in this market, you can truly pursue paths that are not available with other sorts of investment endeavours. A quick return is something that in reality does and has happened to some people in forex trading.

It is also a truth that some people tend to be treated kindly by the market and manage to conquer the failure and make more successful trades.

However, this is not the mentality you enter the forex market with as all these hypothetical cases are not what happens on the day-to-day basis to the regular trader.

Below we continue discussing what should be your attitude when entering forex trading so you can tune up your mind to attracting potential success.

However, there is no doubt that compared to other investment opportunities, forex won’t break the bank in order for you to enter the market.

Here are some of the advantages:

  • You can trade from home and you don’t need to rent an office
  • All you need is a computer and internet connection
  • You don’t need employees and inventory
  • You don’t need marketing and advertising
  • Forex operates 24 hours a day and you can trade as a side job
  • You don’t need a university degree. However, a good education is highly recommended. But then again, you can get the education required with Trading Education. Here’s the link to the free forex course in case you missed it 
  • You don’t need to pay any fees and commissions unlike with other investing options. Additionally, most brokers do not require a minimum deposit.

 

It sounds like forex trading offers some really good opportunities, right?

The high leverage is what attracts traders to this market and you can totally explore its advantages if you want to trade forex with $100. In fact, this is how the majority of people start.

But then again, the primary reason why so many people fail and leave the forex market is the high leverage too. Normally, a minimum of 50:1 leverage is what the majority of the reliable brokers are offering. Of course, the leverage in the forex market is somehow limited and controlled due to government regulations in many countries, however, you still can find brokers who will offer you leverage of 500:1 or even 1000:1!

Despite the fact that this all sounds like a good way to make some big profit very quickly, be aware that the higher the leverage is, the higher your chance is to also lose a lot of money. In a nutshell, you may want to keep the risk and the leverage low.

 

Focus on trading, not on the money

Of course, the main motivation behind you even considering getting involved with the foreign exchange market is making money.

This one can be a pretty powerful engine moving you forwards, indeed.

But it also can pressure you making rushed decisions and fail. This is why you never enter the forex market with the goal of making a million for a year or aiming towards financial milestones. You better think of success as constant progress and growth instead of monetising everything you do and plan to do.

There is a lot of truth in the saying that making money in the market is a result of successfully trading it and you will soon find out the true meaning behind these words.

The main problem with all the newbies considering how to trade forex with $100 is the way they feel the need for making money in a short period, maybe quitting their day jobs and making forex the main source of income in their lives, perhaps becoming millionaires before the age of 40, and surely earning at least what will justify their initial investment and the time wasted.

The problem with all this is that while you are focusing all your brain cells on monetising every step you take, you lose your focus on some more important things for trading such as risk management, mastering an effective strategy, being consistent.

The whole point is that in order to become a good trader, a newbie should start learning how to be good when they trade forex with $100. From them on, it is all step-by-step in learning how to be good at trading with a larger and a larger account. In this case, your focus is not on how to start trading forex with $100 and make a lot of money quickly. You better focus on how to be a good trader first. Once you learn to trade the market successfully the money is more likely to follow.

You might also like: Is Forex Trading Easy or Difficult?

 

Treat your small account the same you would a big one.

The truth is that with a 1 million in your account even a couple of winning trades per month risking a small percent will help you earn substantial money, it doesn’t take too much of elbow grease. However, even if you trade forex with $100 you need to treat your account as it is a big one.

Basically, the same principles helping you to get closer to success apply in both cases. As we have already mentioned, forex traders with smaller accounts tend to be more emotional when trading forex because they want to make this account grow and earn money fast.

However, when it comes to forex trading, the path to a profit is definitely not paved with taking a lot of high risks. You wouldn’t take the high risks and make the rookie mistakes if you had a big account and a lot at risk, right?

A slow, calculated approach and a lot of patience and discipline are what the good forex traders often mention when asked about their success.

So don’t allow this urgent “need” of growing your account lead you to over-trading, over-leveraging, over-risking, and most probably losing money consistently.

Additionally, large accounts are also not built overnight and it takes a lot of consistency and a long-term approach rather than taking big risks. Even the “big fish” in trading have a trading win rate of anywhere between 55% and 70% which is, as you can see, definitely not a perfect and smooth day-to-day trading experience.

Build a consistent track record

Having a very small account means that you need to focus on building and keeping up with a consistent track record. You want to build your confidence as a forex trader slowly and surely even when you start to trade forex with $100. Once you start making a progress and your track record progresses too and becomes consistently profitable you can then consider proceeding with further developing your account and trading larger sums.

The step-by-step approach in forex trading is a very important one. You may have already built your own forex trading strategy and an efficient trading plan.

You want to stick to them and don’t fall into the rabbit hole of over-analysing every piece of data and every headline you have access to.

It is highly recommended to have a forex trading journal too as it will help you stay more disciplined and organised while also providing you with the information to self-reflect and analyse any success and failure.

Don’t miss: The Ultimate Guide to Building a Forex Trading Plan

 

How to manage a small trading account?

In a nutshell, the basic principles of managing a small and a large account are all the same. However, when you manage the money of a small account you will be obviously trading smaller position sizes per trade.

In this case, keep greed and emotions out of the equation and avoid over-leveraging and trading too large.

This is a common mistake many forex trading beginners tend to make and it destroys their accounts faster than you can spell your name.

If you wonder how to trade with $100 the answer is the same you would with any other amount, no matter how much enthusiasm and energy you have at this point.

Focus on trading only the most obvious and confluent price action setups, adopt a more relaxed trading style, don’t be aggressive. This will help you manage your money and it even can increase your chances of making a profit. Every time you enter a trade make sure that you risk the exact sum of money you are truly ready to lose as you could potentially lose any trade.

You might also like: What Are Price Gaps in Forex Trading

 

In conclusion

Like it is with everything in life, there is a theoretical pattern of loss and gain. However, this one does not necessarily translate into probable outcomes and this is the exact case with the foreign exchange market. With nano and micro forex trading accounts gaining more and more popularity these days, opening an account and trading forex with $100 is definitely possible.

In fact, many brokers work with an as low initial deposit as $10 or even the extreme $5 or $1! But there is a significant difference between whether you can start to trade forex with $100 and whether you should do it at all. Just because it is allowed and possible to do so does not mean that you should start with this amount. Then again, just because someone tells you the sum is too low does not mean that you should not try. The leitmotif in all cases, however, is that you have to be realistic in your expectations, do not take high risks respectively use the high leverage of the market, do not get disappointed and emotional, do not enter obsessed with the idea of earning money overnight, and try to definite the meaning of “success” to you beforehand. Above all, you better focus on working on a consistent and efficient forex trading strategy.

Do you feel like in the mood for learning more about forex trading? Why don’t you check out Trading Education’s archive of articles on the topic here? Feel free to like, comment, and share every article you find interesting and helpful!

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