You will hear many professional traders advising their junior counterparts that they cannot achieve impressive results in the foreign exchange market if they start their journey with small capital. As a matter of fact, these tips are not intended for everyone, and it is necessary to understand their implicit meaning and not their literal meaning. These words are mainly addressed to traders who do not possess the virtues of patience and responsibility, and they are unfortunately a characteristic of most of the new traders who try their luck for the first time in the Forex market. It goes without saying that most Forex traders are out of the market not long after.
What are the risks of using a small account in Forex trading? If you start your journey with a balance of no more than a few thousand dollars, you will likely find yourself under pressure to strive to quickly enlarge this account. This pressure is causing many traders to open a large number of deals without limiting them to those that have the best chances of success, and consequently risking a large percentage of their capital. The inevitable result is the accumulation of losses sooner or later (usually sooner), and then the account balance evaporates within a short period. Most of them are forced out of the market due to their inability to return again after losing their money.
But it is also necessary to warn that you may enter the Forex market with large capital, for example $ 100,000, and you are also exposed to the same scenario when your money evaporates quickly due to lack of responsibility. There are a number of traders entering the market armed with all the tools needed to succeed except patience and discipline. Their position in the market is not long, while you will be surprised that traders who do not have large financial balances, but who have enjoyed patience and discipline, have managed to achieve success at a confident, albeit slow, pace to the degree that allowed them to turn trading into the main source of their livelihood.
If you are trading with a small account, you will definitely feel additional pressure to enlarge the account at a rapid pace. Here are some suggestions to help you build a successful career as a trader and protect your account to the greatest extent possible. First of all, you must have a daily job because you will not be able to pay your bills and pay the cost of living by trading in this small account. In any case, you must have another source of income if you really intend to rely on trading as the main source of livelihood. Second, learn to respect the money you are trading with as if it was greater than it actually is – because this money, as you say it is the vehicle that will get you to the point of success, and perhaps wealth. Yourself may tell you that if you have a million dollars, you will avoid the pressure of opening deals with weak opportunities or risking a large amount of capital. Third, you will need a brokerage firm that allows you to trade in small quantities, called micro contracts. Following these tips will help you to manage risk more accurately.
If you do not possess more than $ 2,000, you do not need to be disappointed or despair to convert this amount to a million dollars, but remember that this requires trading with a degree of discipline, and most importantly, you do not feel from the original that you are under pressure to strive to reach the million number. Also, do not forget that this amount, and since it is all you have as trading capital, it is for you your own fortune. Likewise, don’t forget that billionaires look at a million dollars the same as your 100 dollars. As for the idea of emotional stress, some lottery winners dispel everything they earn in the air within a short period as long as they do not assume responsibility. It depends mainly on how you deal with your money and not the value of what you have now. It is the discipline or virtue of discipline that will determine whether you are really able to join the ranks of the rich.