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What is the Minimum Investment for Forex and Bitcoin Trading?

First of all, this trading (trading) article can be used for trading anything, from cryptocurrencies, Forex, stocks to commodities. Here, I use Forex because it's easier to explain and write about. Price conversion if you want to trade BTC. As a beginner, I always recommend playing a demo account. For Forex, there are many brokers, in fact, almost all brokers provide demo accounts. Check here for forex brokers.

For Cryptocurrency, you can use Bityard, Bitmex, Bitfinex. This is real trading, not like at Indodax or cryptocurrency brokers in Indonesia. A demo account should be used to familiarize yourself with the broker's system. However, the prices on the demo are, more or less, different from the real account. If you want, you can use Tradingview to try your strategy.

It should be noted that winning on a demo account does not mean that you can win on a real account.

What is the Minimum Investment for Forex and Bitcoin Trading?

What Minimum Money You Must Have When Trading?

When you have tested your skills on the demo account, you can open a trading account with as little as $100 (Rp. 1.4 million with 1USD = Rp. 14,000) or less.

To be honest, $100 won't make you rich, playing crypto or forex, etc. $100 just to familiarize yourself with the market and the broker. Most of the successful traders start trading real money by depositing from $1000 up to no limit.

As traders start making regular profits and have accumulated $10,000 – $25,000, they start looking at “big player accounts” that offer lower spreads, direct interbank rate execution, and other premium features.

Humbled Trader, a stock trader, states that you should have a minimum of $5,000 if you are serious about making trading your business. As you can see, you can start gradually and invest more only when you are comfortable with it.

How much money do you need to trade forex, cryptocurrencies, etc. is one of the first issues you will have to tackle if you want to become a trader. Which broker you choose, trading platform or strategy you use are all important, but the amount of capital you initially use will be a major determinant of success.

Not all traders are the same, and not everyone trades the same way. Day traders may not need the same amount of money to start trading forex as swing traders do. 

The amount of money you need to trade forex will also be determined by your goals. Are you aiming to simply grow your account, or are you looking for a regular income from your forex trading?

Is there a significant difference if you open an account with $ 100 or $ 3000? The answer is yes.

If you want to start trading, it is most likely because you want an income stream. You won't have much income if you start with $100.

Because very few people are patient enough to let their account grow, they risk too much of their capital on each trade to try to make money, and lose everything in the process.

Why Isn't $100 Enough?

I recommend you to risk no more than 2%-3% of your account size on a single trade. If your account is $100 that means you can only risk $3 per trade.

In the forex market, that means you can take a micro one lot position, where each pip move is worth about 10 cents, and you need to keep your risk to less than 30 pips.

Trading this way, if you have a good strategy, you will make an average profit of several dollars a day. While this will slowly build up your account, most traders don't want to make a few dollars a day.

They want to build their account much faster and will therefore be risking $30 or $50 per trade (or more) in an attempt to turn $100 into thousands as quickly as possible.

This will probably work for a while, but will usually end up with a $0 ending balance. Another problem with trading forex with such a small amount of money is that it offers almost no flexibility in the style of trades you can make.

If you deposit $100, and follow proper risk management protocol, you can only risk 30 pips if you take a position of 1 micro lot.

This forces you to become an active day trader, regardless of whether you want to day trade or not. It's important to trade when your trading strategy ( trading set-up ) is right, not when you feel like trading!

For example with a 10 pip stop loss you will not be able to swing trade or invest, because the price could easily move 10 pips against you, resulting in a losing trade, if you are trying to hold on for long term profits.

It is possible to start an account with a smaller amount, such as $500, but if you do, make a commitment to growing the account for at least a year before withdrawing money again.

If you do this, and don't risk more than 1% of your account on each trade, you can make around $10 a day when you start out, which over a year will bring your account up to several thousand dollars.

What is Swing Trading?

Swing trading is when you hold positions for several days to several weeks. This style of forex trading is suitable for people who don't like looking at their charts constantly and/or who can only trade in their free time.

With swing trading, you are trying to catch long-term moves, and therefore you may need to (hold positions) hold a position through several ranges (ups and downs) before the market actually reaches your profit target area.

The profit target is the specified exit point for taking profits.

For swing trading, you will often have to risk between 20 and 100 pips on a trade, depending on your strategy and the forex pair you are trading (some are more volatile than others).

Your expected profit should outweigh the risk.

If you want to make a trade that has 50 pips of risk, the absolute minimum you can open an account is $500.

This is because you can risk $5 per trade, which is 1% of $500. If you take one micro lot position ($0.10 per pip movement, and the smallest possible position size) and lose 50 pips, you will lose $5 .

Since trades occur every few days, you will likely make around $10 or $12 per week. At this rate, it would take several years to get an account up to several thousand dollars.

How much profit do you get?

If you start with $5000 you can make around $100 to $120 per week, which looks more like an income stream.

Obviously, this is just a realistic picture because you can earn as well as lose. Depending on where you live, this can serve as a decent side income. Note that these are estimates. You will need to practice on a demo account for several months before trading with real money, as it will give you a better idea of ​​your earning potential.

You also need to be careful not to fall into the trap because demo trading is easier than real trading, because you have nothing to lose. Investing a smaller amount of money to start with is always wiser than keeping all the money you have saved.

Always invest what you can afford to lose if you lose! It is important to be realistic about what you expect from your forex trading. How much money you deposit plays an important role in how much you are likely to earn if you follow proper risk management.

If you want to grow your account slowly then you can likely start with $500, but starting with at least $1000 is recommended regardless of your trading style. If you want to earn from your forex trading then I suggest opening a $5000 account.

This means playing with scenarios to find high levels of profits and deposit rates. Most of the traders fail because they take more than 5% of the account amount in 1 trade. All traders must have experienced losses. 1000000% this will happen, there is no such thing as a perfect score or 100% win-rate.

If you risk 10% of your account and lose 5 trades in a row (which can happen), you have depleted your capital significantly and now you have to trade without letting your guard down just to get your capital back.

If you risk only 2% or 3% of your account on each trade, 5 losses doesn't count. (Will be explained in the next article).

The scenario above assumes that your average profit is about 2 times your risk (or more), and that you will win about 60 percent of your trades. This is not always easy to achieve consistently.

Your personal trading style will largely determine your profitability or lack thereof. Although, the amount of funds you trade on forex will play a significant role in your ability to meet your trading goals.

If you start out conservatively and use reasonable money management, you don't need a lot of money to trade forex (it should still be over $100).

It is possible to start trading with as little as a few hundred Euros, provided your trade size is small. If you're willing to do the preparatory work, you should be able to find a trading approach that works for you.

There is one more thing to consider – people who are successful in trading, work hard at it. The more effort you put in, the more likely you are to succeed.

So when facing a challenging new venture, the only viable option is to learn more about what you're getting into.

What about Cryptocurrencies?

If you are trading, it's the same as I wrote above, if investing, it's different.

For cryptocurrencies and stocks, I prefer investing, so not much money is needed.

1 BTC = IDR 130 million, buying 0.01 = IDR 1.3 million. Not expensive, and store for 6 months to 1 year, you can generate 10-20% return (profit).

After working in cryptocurrency, what I see is that buying at IDR 100 million- IDR 110 million and below is very profitable to sell in the future.

Just like stocks, you can buy IDR 1 million and above.

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