Small budget trading guide
Work from home during the pandemic has experienced a sharp increase due to social distancing regulations, this article is about small budget trading, which is a trading guide with small budgets.
The increasingly diverse internet users have encountered a new era in the world of forex and CFD online trading.
One of the advantages of online forex is that you can work from home using supporting devices, including laptops, PCs, or mobile smartphones.
In the past, to start trading you had to spend large amounts of money, but the existence of margin trading can micro contract size gives all retail traders the opportunity to start with only $ 10 or lower.
But is it possible to successfully generate profits with small budget trading? Watch this guide to the end.
Small budget trading explained
The forex market is a gigantic market with a trading volume of more than 5 trillion dollars per day, thus making this forex market attractive to many currency speculators to capture profits from price changes that occur.
These financial institutions started with large funds, hence appear the term hedge funds.
Small budget trading is trading in forex and CFD and even crypto trading by starting at low capital.
The lowest capital in forex trading will refer to the broker where it uses its services. Instaforex for example even allows an initial deposit of only 1 $.
However, the general opinion as a small budget trading is as big as $ 100, this is a small amount of capital in small budget trading, although there are some who even start with only $ 10.
Is it possible to trade small-budget trading?
It cannot be denied that the growth of increasingly sophisticated technology has brought a new era in the digital world.
Currently, forex trading is not only for those who are rich with thousands of dollars in capital. The emergence of trading platforms using leverage has provided opportunities for retail traders to take an active role in participating in forex even with low capital.
Even though this leverage is like a double-edged sword, where one side provides the opportunity to get a high profit. On the other hand, the risk borne by retail traders is also high.
Some brokers even dare to offer up to 1: 1000 leverage. This means that in simple terms to open a position with a $ 1000 contract only requires a margin requirement of $ 1.
So that with leverage a trader can have the opportunity to make transactions that are larger in position size.
How much minimum small budget trading?
The size of the small or large capital of each trader may not be the same. This is of course related to the standard of poverty in each person in a country is not the same.
Simply put, the $ 10 in country A is just enough to buy a birthday cake. But in country B the $ 10 can spend a lot more on stuff.
This means that small size is relative, but when starting forex trading, even $ 10 can start trading. However for a trader whose standard of poverty is high, $ 10 is too low and according to him, the ideal small size is $ 100.
The advantage of starting with $ 100 compared to $ 10 is when trading with the same account type, and open positions with the same position size. $ 100 capital is more flexible to withstand the fluctuation of price changes. It means that the distance of pips is better than $ 10 capital.
So that $ 10 in the capital will usually be hit by a margin call faster. This is just simple logic, but in fact, the result will depend on the trader’s skill.
Where to start small budget trading?
Even though there are hundreds or thousands of brokers, not all of them offer low deposit minimums. So to start trading with small budget trading, you have to find a broker that supports a low minimum deposit.
However, even if you have found a broker with a low minimum deposit, it is also important to read broker reviews. Because it can be a problem if you enter a scam broker. Already tired of accumulating profit, but when withdrawals are not paid.
The following are some of the brokers that allow small budget trading:
At a glance TenkoFX, this broker is regulated in IFSC (Belize) by offering STP, ECN, and crypto accounts.
The STP and ECN models indicate that this broker is not a market maker or bucket shop broker. With tight spreads, traders can start with a minimum deposit of $ 10.
But unfortunately, unavailable cent accounts or micro accounts, so to get started it is better to use a demo account first.
If you are interested in trading with TenkoFX reading the account type and description is highly recommended as there is an inactive account fee of $ 10 per month.
For beginners, this broker may not be supportive, because there is no micro account available.
FXOpen broker has been providing services in forex and CFD since 2003 as a center for technical analysis of financial markets, and officially as a futures broker since 2005.
So that recently they celebrated 15 years of experience in trading services. The broker regulated in ASIC and FCA, available micro-accounts cent, STP accounts, ECN accounts, and crypto accounts.
With a minimum deposit of only $ 1, the FXOpen broker is a popular brokerage company among retail traders.
Instaforex is one of the brokers that allows retail traders to start with only a $ 1 minimum deposit. This broker makes it easy to register even though some reviews give negative ratings, but in fact, this broker still has millions of clients.
This broker based in Russia is regulated by FSC British Virgin Islan (No. SIBA / L / 14/1082) and FSC St Vincent and the Grenadines (No. IBC22945).
Offering many bonus promos and leverage up to 1: 1000 is a broker with a fixed spread from 3 pips.
JustForex is also an alternative for retail traders when starting with small budget trading, as the minimum deposit is only $ 1 on cent and mini accounts. Where for cent accounts offer leverage up to 1: 1000 and mini accounts with 1: 3000.
The broker also offers a welcome bonus of $ 30 under terms and conditions.
The broker is registered with the regulations of the UK FCA, ASIC Australia, CySEC Cyprus, and IFSC Belize. In particular, JustForex is regulated by the IFSC Belize (60/354 / TS / 18).
Another broker that is suitable for beginners starting trading with small budget trading is Exness, maybe this broker is not the best but they offer a minimum deposit of only $ 1 and leverage up to 1; 2000.
Exness is regulated by FCA UK and offers low spreads starting from 0.3. Maybe you need to look for further references if you start with a large amount of capital.
Because from some user statements there is often a difference between the open price and the reality that is detrimental to traders.
Liteforex is also a broker that has been around for 15 years in 2021, launched in 2005 in the same year as FXOpen.
Get regulation from Marshall Island Business Corporate Act number 63888. It gives retail traders the opportunity to start trading with a small budget trading minimum deposit of only $ 10 on a cent account with leverage up to 1: 500.
With several payment methods, this broker can be an alternative for traders with small budget trading.
Next up is the FBS broker, which is probably quite popular because it supports multiple languages and has operations in various countries in Asia and Europe.
They offer a minimum deposit of only $ 1 on cent accounts and $ 5 on micro-accounts. In fact, this broker is one of the brokers aggressively offering bonus promotions to clients. Even though there are certain terms and conditions with this bonus, sometimes it makes retail traders trapped because bonuses are not really free.
Just for beginners, it might be quite interesting at this broker, but some reviews still have doubts or don’t recommend this broker.
XM offers a minimum deposit of only $ 5 on micro and standard accounts, in general, using the Metatrader 4 and Metatrader 5 platforms on various devices such as PC, Mac, iPad, iPhone, Android, and Android tablets.
This broker is under the company, Trading Point of Financial Instruments Limited. By having Licensed and Regulated: FCA in the United Kingdom (Trading Point of Financial Instruments UK Limited), ASIC in Australia (Trading Point of Financial Instruments Pty Limited), IFSC in Belize (XM Global Limited) 4. CySEC in Cyprus with the name Trading Point of Financial Instruments Ltd.
Firewoodfx is a broker regulated in St. Vincent and The Grenadines with regulation number 22160 IBC 2014. It can also be an option for low capital traders, by offering a micro account with a minimum deposit of only $ 10.
Even though it has only been established in 2014, the growth of this broker has been quite good in getting positive feedback from many traders, various payment methods are available Bank Wire, VISA, MasterCard, FasaPay, Local Exchangers, Neteller, PerfectMoney, Skrill, UnionPay.
How to trade small budget trading?
Trading with small budget trading may be a dilemma in itself because the opportunity to open a position is less than ten times. This forces traders to be extra careful when opening first positions.
Try not to let the first position get a loss, because if that happens then often the second position where the lower equity will be a psychological burden in itself.
The following tips may be useful for low capital trading:
Choose high leverage
This may be a bit extreme because high leverage is ideally high risk, but trading with a small budget when using low leverage means that the chances of opening new positions will low.
However, high leverage will provide new opportunities when the first position is losing.
Trade on one pair only
Remember you only have low funds, so it’s better to only focus on trading with one pair. Because the opportunity for you to make multiple trading pairs will only hurt yourself because the small capital being hunted is the accuracy of trading signals.
Choose pair small spread
It is very important to choose pairs with low prices, and usually, EURUSD is a pair that has high value but low spreads.
Money management and risk plan.
even though starting trading with low capital, the trading plan must always be encouraged.
So that you will realize that money management and risk management are very important to be implemented, including those with low capital.
Pros and cons of small budget trading
Starting trading with a small budget might be the beginning of a trader’s ability to be honed properly. There are advantages and disadvantages to low capital.
- Suitable for newbies, this does not require large initial capital and is suitable for learning to trade.
- If you experience a margin call, it doesn’t create mental stress.
- To get to know live trading and feel the psychological sensation of trading on a real account.
- There is some option broker that offer leverage until 1:3000.
- Has the opportunity for a smaller number of transactions.
- Left a low margin level so it is easy to get a margin call.
- The profit obtained is relatively small.
- Cannot using an average or martingale strategy.
Can small budget trading succeed?
Small budget trading allows a trader to achieve success provided he must be able to trade with consistent skills.
Because the main thing needed in forex trading is trading skills and not just the amount of capital.
Some stories from the trader community that some have succeeded in developing capital only starting at $ 5, increasing over $ 150.
This means that the opportunity to be successful with small capital is open to all traders. However, all the final results will depend on the ability of each trader to achieve them.
Small budget trading tips
Small budget trading is not easy, but the following tips may help you to be better prepared to start with low capital.
Choose a suitable broker
You need to find a forex broker that accepts low deposits. You can prioritize brokers who allow deposits with a nominal value of $ 100 and below.
Above we mentioned several list brokers that support low deposits, you can do a search by looking at the reviews of each broker then making comparisons to determine your decision.
For example, TenkoFX has received positive reviews which minimize the risk of profit not being paid, because that is the most important.
Apart from that FXOpen also has many traders joining and this is also good, and it all depends on your readiness to start.
One important suggestion is, to spend money that affords to lose, for example, this could be due to a loss in trading, or it could be a problem with the chosen broker. It is done only for risk preparation.
Use a small timeframe
Your small capital makes it impossible to use a long-term strategy. So it’s better to use a low timeframe and a small target too.
The dynamic price may cause you to fall into regret it if the target is too wide.
You can select this low timeframe H1 and then use the M15 timeframe to determine the best entry so it doesn’t get dragged into big floating.
Use the smallest position size for open positions
Having a small capital must be disciplined by using the smallest position size. Because if you are greedy it can easily become a disaster. It is not profit earned but emotions that can punish yourself.
Use leverage wisely
Some brokers may offer leverage up to 1: 3000. However, you don’t need to use that leverage as it can backfire on your account.
However, if your capital is too low, for example, $ 10 using a 1: 1000 leverage. It may still be possible if you are disciplined with the lowest lot size.
Be careful to enter the market
Small capital will teach you to be more careful when opening a new position. Because if you are too reckless to open a position at any price. One loss can cause your emotions to escalate seeing your capital shrink.
Choose a strategy that is suitable for the short term
Low capital has narrow resistance so it is not suitable for long-term strategies because dynamic pricing can drag your account into a margin call.
Determine short-term market entry and exit times and learn to determine the right entry to reduce dragged orders.
Forex trading is the art of managing money to earn money. As a trader, you must be wise in investing and don’t think of getting rich quick from trading.
Because today you may easily get a profit. But tomorrow you may suffer losses.
If you are on a losing streak and your finances are running low, take a break.
Go back to studying using a demo account and keep learning with low capital first. If one day you become a professional, you will be ready with higher capital.
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