Day Trading Strategies In Forex With Less Than $500

Whether you start with $500 or $1,000,000, it doesn’t matter. What does matter is not only keeping your money safe but also increasing your wealth. Don’t worry if you have had to read the book forex trading for dummies a couple of times over, sometimes you just need a new angle to learn. Below we will show a couple of strategies as well as pointers for a forex beginner with less than $500 in their account.

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  – Jumping Into the Forex Market With $400 In the Account

Starting a forex account with less than $500 will give you more trading flexibility while being able to take a sensible approach with regard to risk management. In addition, it will also give you a better investment return. Since trading is about riding the momentum of price movements (pips), most of the risk lies in seeing the price moving against your expectation.

To avoid big losses due to unwanted price changes, traders should not put more than 1% of their trading balance into a single trade. This is crucial to minimize the risk due to unpredictable changes in currency values. The 1% rule is a well-known method used even by great traders to mitigate risk. By taking less risk on every trade, you will be able to survive a string of losses.

If you have $400 in your account, for example, then you can risk up to $4 on a trade. Always keep this formula and use stop losses properly so that you can always determine your position size.

  – Implementing the Safe Trading Formula With a $300 Balance

If your newly opened account has a balance of $300, you can still buy multiple lots, but with a maximum risk of $3 per trade. Perhaps place a 10-pip stop-loss order from your entry price and trade 3 micro-lots. You would still be within your risk threshold, since 10 pips x $0.10 x 3 micro lots = $3.

It is also possible to set a stop-loss 15 pips away from your entry price, but with only 2 micro-lot positions to keep trading risks below 1% of the balance. By trading just a couple of micro lots, you will get this calculation: 15 pips x $0.10 x 2 micro lots = $3. This tactic works even better with a capital of $400, which results in similar levels of 1% risks:

10 pips x $0.10 x 4 micro lots = $4

20 pips x $0.10 x 2 micro lots = $4

  – Making Sensible Trades With $100 In the Account

Suppose you open a $100 forex account, you will want to put no more than $1 on each trade (which is 1% of your total balance).

The risk calculation is just like the previous ones. Let’s say you buy or sell one micro lot with a stop-loss order placed 10 pips away from your entry price. In this case, your risk would be 10 pips x $0.10 x 1 micro lots = $1, which won’t burn your account. With a capital of $100 and a maximum risk of $1, you will hardly go anywhere as profits will be very small when you trade correctly.

On the positive side, this kind of capital is good enough to help you learn and practice trading with real money. And with a stop-loss order in place, you will always be able to curb your losses from trade at a specific price.

In forex trading, it is important to calculate your profits in percentages. Evaluating your gains this way will help you measure your trading overall performance, thus you will know if the activity is worth your investment. For instance, a profit of $40 may not feel like much, but it is actually 10% when you are on a $400 balance, which is significant. Check Out Starting Forex with $500

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>>>>> CLICK HERE FOR FOREX TRADING SIGNALS <<<<<