How Much Money Do You Need To Start Trading?

One of the most common questions we get asked before traders or beginners open a live account is “How much capital do I need in my account to trade?”.

Firstly, if you’re new to trading, we HIGHLY recommend you start with a demo account.
Starting with a demo account will give you a taste of what trading the markets is like, without the risk. One of the biggest things with trading is being able to mentally handle losing money because it is inevitable. Even if you’ve completed education, there are still things you have to learn through experience.

When Is The Right Time To Go Live?

When you feel you have found a safe and successful system or strategy and have implemented a safe risk management plan. When you feel you can trade without breaking your rules, that is when we recommend opening a live account.

How Much Should My First Deposit Be?

Open an account with as much capital that you don’t need daily access to. Do not trade with your rent money is the goal here.

In terms of numbers, it all comes down to how much you want to risk and your risk management plan. Here at Forex101, we recommend risking no more than 1-2% of your total capital per trade.
if you can only open an account with $100, keep saving. With $100 and 1% risk, you’ll only be getting a return of $1-$2 per trade. Tiny.

We recommend starting with an account with no less than $500. This gives you more freedom for risk and returns. Don’t think you will make a full-time income off of your $500 account, it’s possible, but not that simple. You can, however, make a great side income with a safe risk management plan.

How Much Capital Do I Need To Trade Full time?

First things first, you need to access your yearly expenses.

Then, have enough money for a whole year of expenses to live on without touching your trading account capital so you don’t feel the need to touch your capital whilst it’s growing.

Let’s assume we make a 40% gain a year on your account, the 40% gain that you make in the year needs to be enough to fund you for the next year. On top of that, we suggest an extra 15% of your yearly income set aside for emergencies such as slow drawdown periods, family, etc.

Again, this is just our safe recommendations from our experience and expertise. We haven’t given you figures, because everybody is in different financial positions. If you’re somebody who lives extremely conservatively and small, you’ll be able to go full time and grow quickly.

Do NOT Go Into Debt To Get Capital

This is a mistake we hear of quite commonly. Find any way possible to get liquid capital. Continue to work your job and save a little bit of your wage at a time to fund your account. Do housework for people. Do Uber. Do AirTasker. Sell items you don’t need. Do anything to build a decent amount of capital to invest and let your money work for you.

There is an old saying; Get your money to work for you, as hard as you work for it. When I read that it changed my life.
— Grant Cardone

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