How much money do you need to start trading the financial markets
By: Bartholomew Anaeme
Tags: Finance, Trading, Forex, Forex Trading, Stock Market

How much money do you need to start trading the financial markets

I get this kind of question popping out from every corner, especially from Amateur traders and even some mid-level traders. The truth is that you can trade the financial markets with as little as you can afford, because the minimum amount doesn’t guarantee that you will make money in the Financial markets.

The minimum amount to start forex trading depends on the Broker and most Brokers offer traders the opportunity to open a trading account with as low as $100 start up capital, while some brokers go further to offer traders the opportunity to open a micro/cent trading account with as low as $1. To answer the question “How much do you need to start trading the financial markets,” we have to consider the most important factor, which is the:

OBJECTIVE OF THE TRADER

Traders come with varying objectives; some traders come into the markets with the objective of making an extra income, some traders come into the markets with the objective to know how much professional forex traders make, some traders come with the objective of trading the financial markets fulltime i.e., quitting their day job. But no matter the objective of the trader, the goal is the same, which is making profits from trading the financial markets. The fact that most brokers offer low entry levels of about $100 or less, doesn’t mean traders should always take the bait, yes, I say bait because more often than not traders who start trading with low entry levels end up blowing up their trading capital and who are the beneficiaries of these blown accounts? You guessed right, the Brokers!!! What can be done for traders who can not afford high entry-level capital to start trading? There is only one solution, which is the eight (8) wonders of the world; compound interest.

Compound interest

If you are starting out Forex trading with very low capital, one of the skills that you must master in forex trading that is very vital to you is your ability to compound your interest over time. Compounding your interest is called the eight (8) wonder of the world for a reason that is self-explanatory in its meaning.

Compounding of interest in Financial/forex trading simply means making gains on gains and that is one sure way of growing your Capital to the stage where you can make reasonable forex trading profit per day.

Can you make profits at $100 or less?

When trading with a small capital i.e., $100 — $500, you should focus more on the percentage gain and not the monetary gain, the same principle applies to someone that is starting forex trading with $1 ( 100 cents ) for a cent account, and this is simply because percentage gain makes it easier for you to be profitable over time, and also, it helps a financial trader to easily grow his/her little capital into a very huge capital.

Back to the question above, yes, you can make profits with $100 startup capital and that is dependent on two (2) factors as well, which are; Patience and strategy. When we say patience, some traders might not understand what role patience plays in the financial markets, but patience simply means applying the principle of compound interest while starting out with a small trading account.

Sourcing for funds

One big mistake any trader can make (whether professional or amateur trader) is: Borrowing his startup trading capital. This is a very big blunder most traders make, and they fall into this trick maybe because they must have had some very successful trading months with a demo account or a colleague advised them on taking out a loan so that they can have a huge mouth-watering trading capital and start raking in the millions on daily, this is because there is an unpopular saying that the more the capital, the more profitable a trader would be. Every trader should have one thing at the back of his/her mind; The market is not your friend, and it is not designed to reward you based on what capital you invest. Hence startup financial trading with your spare money and grow it into a six-figure account by applying the compound interest rule.

Conclusion

No amount of trading capital will guarantee you a 100% profit margin in the Financial/forex market, but with consistency, discipline, good strategy, and the compound interest rule, any capital (from $100) will guarantee you some level of consistent profit in the market.

Note: there is no Holy grail in Forex trading, but every trader can be profitable consistently with the right tools and mindset.