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January 18, 2022

How Much Money Do You Need to Trade Forex?

A1 Trading

One of the most common questions we hear from beginner traders is "How Much Money Do You Need to Trade Forex?" and our answer is: well, it depends. The amount of money you need depends on your goals as a trader. Is your goal to make a lot of money or are you going to try to learn first before you deposit more money? Hint: we recommend the second option, Here's why:

How Much Money Do You Need to Trade Forex?

The Reality vs. Social Media: Getting in the right mindset as a beginner forex trader

It is likely you were introduced to forex though a social media guru who is trying to sell you on this get rich quick idea of trading. Believe us when we say we've been there (Watch our video here). However, this mentality is a dangerous mentality for new traders. New traders who believe that making money in the foreign exchange market is easy will often over leverage and blow their accounts very quickly.

The reality is that trading forex is one of the most competitive ways to try to make money. Statistically speaking, the majority of new forex traders lose money in their first year and most new traders give up within their first 90 days. So, if you want to get into forex trading to quickly make a lot of money, you're probably better off somewhere else.

It is possible to make money trading forex, but it's not easy and it takes time. To get to the point in your trading career where you're making money you must be motivated by something other than money, because it won't always be there. Is trading something you are passionate about? Or are you just trying to find a way to make money? Trading will get tough, what is going to help you push through the tough times?

How Much Money Do You Need to Trade Forex?

As a beginner forex trader, we recommend starting with at least $500 on a .01 lot size. With this account size and recommended lot size you aren't going to be making huge returns. However, we would rather you get comfortable making a slow amount of money overtime consistently then taking your $500 and losing it all very quickly because you want to use big positions. If you attempt to trade with a larger lot size you could risk blowing you account very quickly. Remember, it is much easier to lose money in forex than it is to make money.

Although you will not be making huge returns with this account and lot size, you are going to learn a lot and avoid losing your capital. As your account size grows your overall gains will also grow.

What You Need to Consider Before Trading Forex

How Much Money Do You Need to Trade Forex?

Before putting real money into forex trading you have to understand the risks. Knowing that statistically most new traders lose money, it is likely that you will also lose money at the beginning. We do not recommend putting money into forex that you cannot afford to lose. If you do not have money to put into forex that you are comfortable with losing, we recommend trading demo. Trade on a demo account until you are able to put aside this money and feel confident in your strategy.

Additional Resources: How Much Money Do You Need to Trade Forex?

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DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here
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