This is how to trade forex with small capital

How to trade forex with small capital – Not many people know that starting forex trading with large capital up to millions or even billions does not necessarily bring big profits. Success in forex trading does not depend on how much capital you deposit.

On the other hand, if people with less than 1 million rupiah in capital can even get 100% profit in a week, it is possible that people who deposit 100 million rupiah in capital can lose their money in a week. Knowledge, experience and perseverance of a trader will determine success.

How to trade forex with small capital

Use the demo account until you are competent

Practice with a demo account is also required. The broker makes it easy for would-be novices to demonstrate accounts to improve their skills. Even if the profit is very good for reducing wrong decisions and losses. If you have mastered the demo account, you can already trade with small capital. How to play forex discipline with the following small capital:

Choose a Low-Trade Forex Broker

Do not choose an elite broker from the United States or similar if you have limited capital, but choose a forex broker that offers the following facilities: There is a free commission feature. Or low commission
Minimum spread for major pairs is less than 30 pips. There is a replacement-free function.

Make sure your forex broker has received official approval from the appropriate institutions in their respective home countries, such as local forex brokers regulated by CoFTRA. You must really master the following factors:

  1. Understand the use of online forex platforms .
  2. Understand how to analyze and trade forex .
  3. Create a forex trading system and test its reliability yourself.
  4. Use the forex trading system to make a profit of at least 50% of the initial capital of virtual funds on a demo account.
  5. Request additional virtual funds from the broker or open an additional demo account with the broker and then start training again from scratch.

When you are ready, you can play forex with small capital, here’s how:

Prepare capital for trading

The capital at stake is not big capital, but cold money. Cold money is a term for funds that are not needed in the near future and can be sincere in the event of a loss. This is one of the keys to successfully playing forex with small capital, as it reduces the mental strain of making those profits, allowing you to explore more trading potential.

The size of the small capital is up to you, you can use the benchmark travel budget or budget to treat friends on birthdays.

Prioritize capital protection

Set a medium profit target (TP) and stop loss (SL) between just 10-25 pips. Don’t chase profits up to hundreds of pips, even if the resilience of your capital is very low. As has been emphasized several times, traders with small capital don’t have much room to play around.

For that, you should prioritize capital protection over the pursuit of profit. After determining the amount of capital that can be used for real trading, the next step is to determine how much leverage and trading volume there is.

Limit leverage and trading volume

Rules for both of these should be established from the start so that you are not tempted to trade too much or owe too much. Please note that excessive use of leverage and trading volume is the most fatal cause for traders with little capital.

If you start trading forex with a capital of 1 million rupiah or less, do not use leverage of more than 1:100 or trading volume of more than 0.01 (microlot) per trading position. Last but not least, you should also limit the number of trading positions opened at the same time.

If you use a volume of 0.01 lots but open 10 trading positions at once, the risk of loss remains high. We suggest that there are only 1-3 floating positions at a time.

Use signals with high probability

If you can create a trading system with a high win rate while practicing a demo account, you can also apply this system to a real account. Before you start trading, first make sure that the trading signal you are using can generate a win rate of at least 60%.

Traders with large capital can manage the system in such a way that they remain profitable, even if the trading system often loses. However, traders with low capital should use a trading system with a higher win rate because the scope of capital maneuvering with money management is very narrow.

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