Why you Should NOT Trade Forex with 100USD

not100usd

In a different article, I show you ‘How to grow your 100USD forex account to 1000USD in a year’. Click HERE to read that article. It is possible. In this article I however try to dissuade you from trading with anything less than 1000USD in your account. Please hear me out.

According to the Money Management practices introduced to you in the article ‘The First rule of trading forex’ (Click HERE) a shrewd trader should never expose his entire capital to the market. The profits double or triple when you do so, but so do the risk of you getting wiped clean in one blow.

In fact if you have read the article then you know that at any one given time, unless you are a pro-trader, only 2% of your capital should be available on any position you have open. That way when the market moves against you, you only lose 2% of your investment.

Let us now construct this trade practically.

You have 100USD in your trading account. Because you only want to risk 2% of your capital, you set a stop-loss of 20pips and a take profit of 10pips. With lot size set to 0.01, you are risking only 2USD per trade (and making 1USD when you hit your take profit and losing 2USD when you make a loss and hit your stop loss).

Let us assume that you are trading on a very volatile day where many trading opportunities are presenting themselves. If by the end of the day you have lost 3 trades (6USD) and won 10 (10USD) you have made 4USD. Let us average it at 4USD a day. Again, I am being very generous with this figure.

To gain 13 trade opportunities means you have been sitting in front of your computer the whole day to make only 4USD per day. Is it worth it?

Now compare the same figures with a 1000USD account which can trade with a lot size of 0.1 making one dollar per pip or 10USD when you hit your 10pip take-profit with 20USD risk for the stop-loss. Even on a very normal day with a good trading system like the FREE Alpha and Omega Trading System (Click HERE to check it out) this account should net you 50-70usd per day. Now THAT is money worth sitting down the whole day for.

My advice? Continue hustling or working your day job to get money to fund your account and once you hit 1000USD, get a good trading system and start making real money.

Please share your thoughts in the comment section below.

I wish you happy and prosperous trading.

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