How much capital do you need as a trader? How much capital do you need to trade? A question that many beginners ask themselves. Therefore, we would like to address this topic in this article today. So that you can estimate how much capital you need if you want to start trading or earn money with it. Often people have little capital and high expectations.
What do you expect from your trading account?
Before you target a certain amount, you should first clearly define your expectations. Would you like to learn to trade with the opened trading account? Do you want to earn your money with it? Or is it intended as an extra income?
Are you a complete beginner or do you already have trading experience? Since experience is very important in trading, you usually go through several phases:
First of all, you learn and absorb knowledge. In the next phase you apply it. But still make mistakes. In the next phase, risk management becomes extremely important. Because you want to earn money here. To be able to make lasting profits on the Forex market.
This is how you can start trading
Small trading account: You open a trading account and pay in an amount of e.g. 500 euros. With this money you learn to trade. The important thing is: you don’t get rich by doing this. But the account is used purely to learn to trade. You get to know the trading strategy and how to pay attention to risk management.
Even if it’s only a small amount of money, you learn more here than in a demo account. Since psychology plays a role here.
As soon as you feel safe you can trade with higher capital. However, you should only do this if you have mastered risk management and can thus minimize losses. It is important to take a maximum of 1-2 percent risk per trade.
Demo account: If you learn to trade in a demo account, it is important to use the same amount and lot sizes that you will use later in a real money account. So that you get the right feeling for it. It is useless to trade in a large demo account and then later you will not be able to cope with other sums.
You trade later with your own 5000-10,000 euro account. Then the demo learning account should also have this size.
How much capital makes sense to trade?
Only use money that you are willing to lose. In no case should one use money that one actually intended for a living. Don’t take out any credit for trading! That won’t work in the long run.
In trading you have to act without emotion. You can’t do that with the pressure on your back because you always have the money in the back of your head. Because it’s actually planned for other things. So first give yourself the time to learn to trade in peace. In order to be profitable in the long term afterwards.
First learn with a small trading or demo account. If you then trade successfully you can trade with a higher trading capital or with borrowed capital trading.