Beginners venturing into forex trading often have high expectations. Well, forex trading can be extremely profitable, as seen from the numerous success stories of people who have built fortunes trading. However, it has its fair share of risks, and it is essential to be wary of them when scaling up your investment. The inflation in recent years has reduced the value of $100, and many people might be wondering whether they can start with this in their forex investment career. The sad truth is that it all depends on the path you take. If you are patient and have a desire to learn, you can successfully trade forex with $100 and build a huge capital base. On the flip side, you can lose this amount in a single trade and probably never log in to your investment account ever again.
Research Is Key
Before you try to trade forex with $100, understand that knowledge is power. Try and know as much as you can in the market.
Find out about markets and trading in general, as this will help you make decisions that will increase your chances of making profits.
If you want to make a quick gamble with your money, then you do not have to learn much more than how to enter orders in your brokerage platform.
Research and knowledge will give you consistency and shape you up for the long haul in forex trading. You will need to understand more about certain currencies and the factors that affect their valuation.
Good brokers will offer resources such as eBooks, articles, and videos that will help you understand what you are signing up for.
How Can You Trade Forex with $100 Profitably?
Here, we are going to assume that we live in an ideal world and all the flashy advertisements telling you how much money you can make are valid. You are looking to start a steady, forex investment career that will yield a healthy monthly return.
In reality, you can achieve this thanks to the high leverage in the market that allows you to pursue paths that are not offered by other investment opportunities. While we discourage you from pursuing quick returns in forex trading, this is something that does and continues to happen to some people.
Some people are lucky to get some TLC from the market, and they make more successful trades that overshadow their failures. However, this is the wrong mentality to hold when entering the market as the chances of being disappointed are high.
The leverage levels offer you an opportunity to trade vast amounts of money with your mere $100. Well, most brokers will provide a minimum for 50:1 leverage, which means that you can trade $5000 worth of equity at only $100.
Country regulations control these leverage levels, but you can still find brokers offering you leverage in the region of $1000:1.
While all this sounds good to you, note the higher the leverage, the higher the probability of losing a lot of money. This way, it is better to approach investing safely by keeping risk and leverage low.
Focus on Trade and Not Money
This might appear a bit strange since your primary motivation behind forex trading is to make money. However, focusing on trade can be a huge asset for the long haul.
It inhibits you from making rash decisions and thus protects you from constant failure. Look at success in terms of the progress and growth as opposed to how much you make when you trade forex with $100.
If you do this, the money will come as a side effect, and before you know it, trading will be easy. If you want to monetize all the steps you make and strive to make the most returns out of $100, you tend to forget about critical things such as maintaining a strategy and risk management.
The idea is to become a good trader, and the $100 you invest should help you do this.
Avoid Emotional Trades
With a lot of money in your account, a few winning trades a month can result in huge returns. You do not even have to risk a lot.
Try and trade forex with $100 in the same way that you would if you had a $1 million. It is hard to keep calm as most small traders tend to get more emotional with their accounts due to impatience, and the insatiable need to grow their capital.
The path to profit is defined by taking a lot of high risks. You would not dare do this with your big account, and once you get this mentality, you should be good to go.
A slow and calculated approach is what the best forex traders take on their path to success.
Understand that since something is possible does not mean that it is probable. If it is difficult to get a $5,000 account to $10,000, what about getting a $100 one to $1000.
Forex trading is that it should not be done with scared money. This way, all the money you use to trade should be disposable, and you should be able to pay your bills and go on with your life normally.
If $100 is the only disposable amount of money you have, it gives the impression that your financial situation might not be as secure as it should be to cushion you from all the risks associated with trading. The hard truth is that you should consider trading Forex or any other market once you can afford to lose money.
If you want to win at trading, you cannot be scared of losing money.
In recent years, nano and micro forex accounts have flooded the market, and it is possible to trade forex with $100. Some brokers allow deposits as low as $5.
However, you should understand the difference between whether you can trade forex with $100 or whether you should do it. The key is to be realistic with your expectations, avoid taking risks with huge leverages, and learn the skill of investing rather than rushing into it to make overnight fortunes.
Once you focus on building the right mentality and trading strategy, you will be comfortable trading even $10,000, something that overshadows the urge to become a day trader with $100 quickly.
