Trade Forex With $100- Forex Trading

Last Updated July 23rd 2021
6 Min Read

Foreign exchange (forex) trade is one of the most accessible and reliable trading methods. Unlike the futures or options markets, forex is a leveraged market and allows you to open trades with just a small amount of money. You can start a trade forex account with as low as $100!!

But how do you trade with such a small initial capital? Should you start trading with only $100 in your forex account? And how long does it take to make money from your initial forex deposit?

If you are a newcomer and want to start out in the foreign exchange market, you are probably going to have some of these queries in your mind.

Read to learn how to trade forex with $100.

Step 1: Research the market

Step 2: Find a suitable broker

Step 3: Open a demo account

Step 4: Open your forex account with $100 and start trading

Should you trade forex with $100?

Trading forex with $100: What to keep in mind

Trading in the forex market comes with its own set of challenges and rules; and there are certain consistent forex trading strategies and plans and a few factors that you need to consider. In this article, we will go through the steps to get you started with the process of trading forex with $100.

Step 1: Research the market

research the market

With the right education, market research and a lot of practice, it is easy to pick up the strings of forex trading. Gathering sound knowledge about the world’s financial markets is essential for you to succeed in this trade.

If you’re looking for some great results in forex trading, make sure you constantly educate yourself about the value of the different currencies and the fundamental factors that influence the market relatively. You should also keep a constant eye on the market’s fluctuations. There are many great forex trading courses, free and paid versions, available both online and offline where you can access resourceful articles, e-books, webinars and forex trading tutorials. These can help you learn more about the forex market and can be highly effective in the long run.

But how do you learn to analyse a market’s behaviour and predict its direction?

There are two main analytical market research methods for traders - fundamental and technical analysis – that should take you on the road to forex trade.

Fundamental analysis

The economic policies and geopolitical shifts of a country will influence the value of its currency. Therefore, observing and analysing these influencing factors is an important step that should be taken. As a trader in forex, you should take a note of the following to predict the future of a currency’s fluctuation, both short-term and long-term exchange rate trends:

  • Geopolitical shifts and other major economic policies
  • Central bank monetary policy and benchmark interest rate levels
  • Gross domestic product (GDP)
  • Employment statistics (Non-farm payrolls, unemployment rate, weekly initial jobless claims, etc.)

So how do you get the information? Trading platforms include a news feed to help you with your fundamental analysis. You can also check the economic calendar that lists all the important upcoming economic releases for various major economies. 

Technical analysis

There are both manual and automated technical systems that can analyse technical indicators and interpret the resultant data that gives a better understanding into a buy or sell decision. There are charts and computed technical indicators that identify common patterns and predict an exchange rate’s future movement - both short- and long-term trends in the market.

Some of the technical indicators include:

  • Moving averages
  • Momentum oscillators
  • Overbought indicators
  • Oversold indicators
  • Volume figures
  • Moving Average Convergence Divergence indicator (MACD)
  • Relative Strength Index (RSI)
  • 200-day moving average
  • Trading volume
  • Past price movements

Step 2: Find a suitable broker

Finding a good forex trading platform and choosing a reliable broker that has enough experience is the next step towards trading. Take a look at the key factors below when choosing a broker:

  • Comprehensive trading tools
  • Features the trading platforms have to offer
  • Commissions and spreads
  • Business model
  • Trading education resources
  • Customer service and value added service
  • Regulated broker

Research and read their reviews and decide on a broker that suits your needs.

Step 3: Open a demo account

Before you start doing the real business by opening a live account, open a fully functional demo account. A demo account has the complete technical analysis tools that reflect the market conditions; however, the safe part is that you need not have to make a deposit.

With a demo account, you get the sense of a real trade, but in reality you are only doing the trading virtually. It also lets you to learn how to use a broker’s trading platform without spending money. This also helps you plan your own trading strategy.

Step 4: Open your forex account with $100 and start trading

Once you have familiarised with the demo account and are confident enough to do forex trading on your own, you can open a live account and fund it with $100. Decide on two financial currencies that you want to work with. You can start by trading in micro-units with no more than 3% of the total investment money in total market exposure. This keeps the position within allowable risk management limits. Later you can increase the size of your trading units.

Should you trade forex with $100?

Trading forex with $100 is possible and profitable.

However, you should be financially stable and able to lose your money initially. You won’t be able to generate enough revenue from a little investment of $100. But if you want to learn trading and money management, it is best to start with $100 only. It is also the best way to transition from a virtual account to live account.

Read Also: The Richest Forex Traders In The World

Trading forex with $100: What to keep in mind

Here are some pointers while you trade forex with $100

  • Treat your $100 account the same way you would treat a larger one
  • Use disposable funds only
  • Stick to a pair of currencies that are easy to analyse and that you are familiar with
  • Be prepared to lose
  • Avoid the news spikes
  • Track all your loses and gains
  • And practice trading

Follow all the above-mentioned steps to trade forex with $100. Whether you are getting started or ready to take your forex trading to the next level, you will need to work hard to get more capital.

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