How Much Money Do I Need to Start Trading Forex?

How Much Money Do I Need to Start Trading Forex?
By Adam Woods

It is a misconception that one needs thousands of pounds to start trading on the forex market. Since the development of super fast internet and live data feeds it has become more and more popular for the average person to trade forex from the comfort of their homes. It is no longer a speculating market for the major banks and financial institutions.

Because of this development and interest in the home trader, spread betting has become more accommodating to all financial situations, offering beginners the option to trade for as little as 10p a pip. When answering the question, how much money do I need to start trading forex? One must first look at their money management strategy.

It is an unfortunate truth that in forex trading you are always going to suffer losses at one time or another, no matter how good your strategy. This is the reason many professional forex traders have a money management rule that they will not trade anymore than 5% of their trading balance. An example of this would be; if you were planning to trade at £1 a pip with a 30 pip stop loss that would give you a possible loss of £30. To be able to manage this loss at 5% you would need a trading balance of £600 in the first instance.

As previously mentioned some spread betting platforms allow beginners to have accounts that can trade as little as 10 pence a pip with this type of account and using the money management equation one could trade get started with as little as £60.

Although this money management plan is recommended it is not absolutely necessary and one can trade with just the minimum margin requirement for that particular currency pair. For example, the GBP/USD on one particular spread betting platform has a margin requirement of 60-200 therefore you could trade at £1 a pip for as little as £60. If you where to lose that particular trade you would have to deposit more funds in order to continue trading.

Adam has been [http://www.bankonadam.com]trading forex for 5 years and until recently with little success. Adam recently joined Colin Atkin's [http://www.bankonadam.com]private members club and has since seen his profit margin quadruple in the past two years. Colin is a professional trader who shares his trading live, over a webinar three times a day 5 days a week, all you have do is copy what he does and take the profits. Since Adam joined Colin he has had the money to invest in other projects and gone on to be a successful full time forex trader and internet marketer.

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