Things that you can do with $100 in Your Forex Account
- Learn vital lessons about money management since you only have restricted capital.
- Make a smoother transition from the world of virtual trading to the world of live trading. Just remain as demo account to make the transition cause live account are very different from the world of demo trading that use real money.
- Emotion control. Learn to trade with real money, but not so much as to make you lose sleep. That way, you can condition yourself to what the real money trading situation will bring.
How to Start Forex Trading with $100
Now a days, opening and funding forex account is easy. Just do it using any of the payment methods available from the broker. After funding your account, you can then trade forex with $100 following these;
Money Management
- Trade not more than 3% of this money in total market exposure. Trade micro-lots ($1000 minimum position size).
- If you hold an account with a UK or EU broker (maximum leverage 1:30). With a margin of 3.33%, this means that you cannot trade within the boundaries of risk management with an EU broker, as you will need at least $33 to trade 1 micro-lot.
- However, any of the other popular offshore jurisdictions still offer leverage of up to 1:500. A micro-lot would therefore need just $2 commitment from the trader, which keeps the position within allowable risk management limits.
Risk-Reward Ratios
- Risk refers to the Stop Loss (SL) you will use, and reward has to do with the Take Profit (TP) setting. Do a target to make 3 pips in profit for any 1 pip risked as stop loss. Using your allowable money management that restricts you to 1 micro-lot positions, this means that you should be prepared to target $6 for every $2 used in the stop loss. This translates to at least 60 pips TP, and 20 pips SL.
- Be a super-selective of your trades. When there is a high chance of winning, only enter the trade. Use chart patterns such as the flag and pennant have standardized profit targets, and the pattern boundaries to help define the stop loss.
Avoid the News Spikes
- With limited capital, avoid news trades like a plague.