As a beginner, of course you have to start trading forex with minimal capital. This aims to minimize losses or risks that could occur. For that, for those of you who want to start forex trading, take a peek at the following forex trading tips with small capital.
Playing forex with large capital is indeed a risky time. Many people have lost large amounts of money due to lack of knowledge and experience.
For this reason, it would be better to follow forex trading tips for beginners with small capital while learning the world of trading first. Here are the tips we can share.
1. Using a Demo Account Until Advanced Trading
The first step you need to take is to practice with a demo account. Usually brokers provide demo account facilities for beginners so they can hone their skills.
If you have mastered the demo account, then you can try trading with small capital in a disciplined manner.
2. Choose a Forex Broker that Has Low Trading
When you decide to trade with limited capital, then choose a forex broker which offers qualified facilities for you. These facilities include low commissions, minimum spreads for major pairs under 30 pips, as well as free swap.
You also have to make sure that the broker you choose has official permission from the institutions of their respective countries.
3. Forex Trading Tips with Small Capital by Prioritizing Protection
As a novice trader with limited capital, you must also prioritize protecting your capital. Apply a moderate profit target, for example 10 -25 pips.
In the early stages, try not to chase profits of up to hundreds of pips. This is because the resilience of your capital is still minimal so if a trader doesn’t have large capital then there is no room for playing around.
For this reason, you need to prioritize capital protection rather than chasing big profits. Then, if you already have a certain amount of capital for real trading, you can determine leverage and trading volume.
- Limits Leverage as well as Trading Volume
Regarding the limitation of leverage and trading volume, these two rules must be set from the start. This is to avoid over trading or over leverage. It is necessary to know that excessive leverage and trading volume can cause fatal losses for traders with small capital.
Apart from that, you also have to limit the number of trading positions that are opened at one time. You can try to only have 1-3 floating positions at a time.
- Using High Probability Signals
For those of you who create a high Win Rate trading system when practicing on a demo account, this system can also be applied in real terms to trading activities with minimal capital.
First make sure that before trading, you have a trading signal that can generate a minimum Win Rate of 60%. Trading with small capital really has to use a trading system that has a higher chance of winning or a higher Win Rate.
That’s how to play small capital forex. Hopefully this article about forex trading tips with small capital can add to your understanding as a beginner. See you!