➤ Venture capital on Forex trading

➤ Venture capital

There is also the issue of how much money a trader can use to start trading with Forex.


Not all money is good for trading. The funds you can not afford to lose should not participate in any kind of market speculation because of the implicit financial risks. Neither your pension funds, the mortgage or the costs of teaching your children are an option. It might be wise to refrain from borrowing money to trade with them.

Why trade only with venture capital? Well, aside from avoiding the financial risk that your buying operations can create for your life and the lives of those you love, you should consider using venture capital only for your own trader's peace of mind.

Every book on negotiation psychology will tell you that professional buying and selling operations are fairly impartial and that a trader has to take it easy at all times: when analyzing the market, when placing orders, when he has losses and even when he has earnings.

A professional in buying and selling operations is cold when calculating, does not get excited about the profits, does not feel anxious about losses, does not bet or performs guessing games. It's all analysis and calculations.

Will he be able to stay calm and be impartial while watching his mortgage funds disappear before their eyes? Hardly. You will be thinking about the possible consequences and not buying operations. Ironically, pure distraction could become the very reason for the loss.

An even greater danger would be, perhaps, to invest what it can not afford to lose and win. Because in a blind impulse of confidence, that could lead you to want to double the investment only to lose twice as much. Luck remains its only methodology.

Here is a rule for you: just invest the money that in case of losing will not harm your life or your psyche or those you love.

Risks and Expectations with the sales transactions

Risk management:

How much money are you planning to make in a given period of time? Think of a number per month and per year.

In general, ambition is good, but when it comes to buying and selling operations unrealistic expectations can cause pressure, biasing your perception of the market and ultimately, provide poorer business performance.

The important thing here is not how much money you need to trade Forex, but rather how much money you need to open a Forex account and trade securely.

The more you want to earn, you will need to invest even more in order to keep the risks at the same level.

The level of risk is decided by the traders and works as follows.

Let's say you do not plan to risk more than 1% of your account balance in a single operation, which is quite reasonable. If your account has $ 1,000 with a leverage of 1: 100, that means you can only risk $ 1 per transaction. In the forex market this means that you can take a position of 1 micro-lot or a lot of 0.01. This will set the value of the pip at around $ 0.10 cents. In addition, to stick to a 1% risk level you can not afford a decrease below 10 pips. A major problem with purchase transactions with few funds and with a strict risk ratio is the lack of flexibility in the choice of trading styles. You are practically confined to active operations within the day.

What happens if you do not have the time or the stomach for this type of negotiation?

Undoubtedly, the risk quotient may increase, but as a general rule, safer trading styles favor your account more slowly. Most traders do not want to make a couple of dollars a day and the market encourages them to increase trading volumes or the number of trades opened at the same time. This may work in the short term, but usually results in a $ 0 balance in your account.

So, what would be most suitable for his great ambition? Save more money before opening a Forex account. By properly financing your account you can get benefits while keeping your risk quot under control.

Every trader has the dream of opening a small account and becoming a millionaire in a few months. In theory this is possible due to the high level of leverage, but statistically speaking, it is very unlikely. The reality is that it is not feasible if you operate with a small account. Although profits can be accumulated and capitalized as time progresses for beginners this is too slow and they feel forced to use large amounts of leverage or to negotiate with larger and higher risk volumes to be able to increase their accounts more quickly.

Professional fund managers tend to they usually make less than 10-15% a year. Traders who handle small accounts often assume that in a year they can double, triple or even make 10 times more money than fund managers. A vast majority does not, and in the process of realizing this, they end up abandoning buying and selling operations when a good amount of money has already been spent.

Intermediation is about getting rich consistently instead of getting rich quickly.

Lack of education, unrealistic expectations and lack of financing are the main sources of risk in foreign exchange operations.

Leverage can provide a trader with a way to participate in a market with a high capital requirement, however, the 1% rule must still be used in relation to the trader's personal capital. Profits should be seen with the growth of the account. The account must be large enough to provide monetary returns that allow you to live or let the returns be small and make buying and selling a second source of income.

In conclusion we will summarize all the factors involved in answering the question "How much money is needed to trade Forex".

- Decide why you want to start operating to understand what type of results you intend to achieve.

- Find out how much time you can devote to buying and selling operations to reduce the list of trading strategies that are available to you.

- Put on a scale your personal attitude towards taking risks in life and in foreign exchange operations.

- Evaluate how much money you can afford to invest without exceeding the limits of your risk capital.