Newcomers looking for a foreign exchange trading tutorial are always very eager to get out there and start earning profits but lacking the proper attitude to your trading capital this in many cases does not work out well. You could assume that you want to get started so you start out with a tiny capital and you are not shocked if you lose in the beginning, but at the back of everybody's mind is the expectation of earning large profits and it will be very disappointing when things go wrong. In truth, most newcomer traders give up almost before they started, just because they got started without the appropriate preparation or enough of a back up trading capital. So how much money do you really must have to get engaged with currency trading?
Certainly it is true that you can open a real-money trading account these days with just a hundred dollars or even less, but for most traders that is not a great idea. You cannot start out with such a little startup capital and dream to become rich from foreign exchange trading any time soon.
Another obstacle with starting currency trading with a too tiny account balance is that you will be forced to overtrade. You could start to treat it as a game. You will want something to happen and you don't have much to lose so you can initiate a transaction that does not fit with your method just as an experiment. Sometimes it will win, frequently it will lose. Generally on balance you will lose money that way, but that is not really what matters. The real problem with this is that except you keep very precise records (which is hard to do when you are only betting cents on every trade) you will end up not knowing if your original forex trading strategy would have been a winner or not, as you didn't keep to it.
As for how much money you need, it's quite likely more than you believe. Brokers will let you open a mini account with $1,000 but if that is everything you have to trade with, then a micro account is more advised. You should be trading micro lots or your risk will be too high and you may lose it all.
Multiplying that up, it would be advisable to wait until you have $10,000 to open a mini account. And joining the big boys with a standard account requires at least $100,000 if you want to give yourself a fair chance of success.
It sounds like a huge sum of money but there is no need to let this hold you back trading. Just bear in mind to think small and get started with micro accounts if your funds are not big enough. It is also recommended to use forex trading signals, in order to improve your risk/reward ratio. But even the best forex signals will not guarantee success if the margin equity is insufficient.
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