As a new trader in the forex market, you may have questions about “how much money do I need to deposit so I can start trading forex”? Well, this question can be answered based on the capital (money) that you have to trade. If you have a larger capital of money to deposit in the financial market, then you can trade with larger amounts and open trade with bigger lot sizes.
Or if you have a tight budget to trade the foreign exchange market, then you may start with a small deposit of money. But a smaller balance on the accounts means that you will have less more margin. You’ll also have to open trades with smaller lots and be careful with risk management.
Most of the forex brokers offer different account types that have limitation on deposits, currency pairs, trading platforms, etc. Some of the most known account types from forex brokers are standard accounts, razor accounts, zero spread accounts, etc.
To answer the question correctly, you only need to have a winning strategy on trading.
A winning trading strategy
As we said, you can deposit a small minimum amount of money in forex such as $5, $10, $20, etc. You can also trade with larger amounts of money that can give you more limits when it comes to the lot volume size, margin, high leverage, etc.
But you don’t need only a small or large amount of money to trade. You need to have a strategy that’s profitable in forex trading. If you have found a winning strategy of trading on a demo account, then you may not worry about the amount you need to deposit. Since you have practiced enough and have found a profitable trading strategy and you know how to do the technical analysis.
You can start trading with different amounts of money, but a winning strategy can help you increase the profit even from a smaller amount. For example, if you don’t have a larger amount of money, then you can deposit even $5 on a standard account, micro account, or razor account and increase the account’s balance from that small amount of money.
But if you trade with a smaller account balance, then you may see the progress of your account slower. In an account with a $5 balance, you can open max 1 trade per at the time. Because if you open more than one trade at a time, then in situations where your trade goes on a loss, your account can quickly go to zero.
Trading with a larger balance account can be riskier, but if you have a winning strategy with proper risk management, you may be profitable with a large account balance too. A larger account balance can be even more beneficial, as you can open more trades and with bigger lot sizes too.
The margin will allow you to trade more since you have a larger balance in your trading account. Also, with a winning trading strategy, your account’s balance can grow faster than on a small account balance.
As a summary of this article, you can start with any amount you want in trading. But the only thing you need to consider before asking yourself “how much money should I put on trading forex” is to have a successful forex trading strategy.
If you have traded for a long time on a demo account, then a live account for you as a forex trader can be more different to trade. Because you’re trading with your real money and other factors like emotions start to become more intense in your trading.
When you spent enough time on a demo account it can affect trading foreign currency pairs efficiently. You will be able to find your trading style like day trading (day trader), scalp trading (scalp trader), or swing trading (swing trader).
And a successful trading strategy that involves the technical and the psychological aspect can make you a successful trader in the financial market even with a small deposit.