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Already many centuries ago there was a lively trade with commodities and gold. In this way, people made sure that there were enough goods available in the respective city and in their own homes. Therefore this kind of trading is not new, but as old as mankind. Barter and trading are closely connected and have developed over the centuries. Today, trade is conducted over the Internet and no longer refers only to commodities, but also to currencies. When talking about Forex, most people know that it is a world trade that cannot collapse due to high stability. And as long as there are different currencies in the world, Forex trading can be done.
Different things are needed to get started in Forex trading. Since currencies represent values, trading is not done directly on the stock exchange, but through an online broker who offers Forex trading to secure profits from the rates. However, before choosing the Forex broker, the question of how much capital is needed for Forex trading always arises.
How much capital do you need for Forex Trading
Since not only stock exchange trading but also over-the-counter trading has changed and is now conveniently available via the Internet, investors do not need a lot of capital for Forex trading and stock exchange trading in general. In many cases 1 Euro is already enough to start trading. Whether this small sum is however meaningful, is once dahingestellt. Many online brokers do not even require a minimum deposit when opening an account. Therefore, the real money account can be opened with 0 euros quite comfortably. However, there are restrictions for certain financial products.
With the opening of an account, traders have access to the free demo account with many online brokers in order to expand their knowledge of Forex trading and take their first steps in trading. For this purpose the broker provides virtual money. With the demo account, real money trading is simulated, whereby the same conditions apply. With the demo version of the real money account, especially beginners have the opportunity to get to know the trading platform before real money is invested in trades.
There are no costs for the trader with the demo account, so investors can sit back and relax and place trades with the virtual money. At the same time, most demo accounts have unlimited use and can be replenished with play money, so that new markets, strategies and methods can be tried out without taking any risks.
Which financial products are tradable?
Not all financial products are suitable for trading with a small starting capital. Therefore, it is important to take a closer look at what trading opportunities are available:
- Forex trading, i.e. trading between currencies, is already possible with a small starting capital. There are positions that can be opened with just a few cents and therefore without much risk. In addition, it is possible to work with a lever to increase the profit. As starting capital 1 Euro is sometimes sufficient.
- Who would like to look around also in the CFD trade, this can also be done with a small seed capital. The trade is off-exchange and is settled between online broker and trader. Already with a very small starting capital, trading with CFDs is possible. At the same time, a leverage can be used just like with Forex trading. This has an effect on profit and loss. The value of a CFD is reflected on the stock exchange.
- Shares and ETFs are securities of companies, whereby traders purchase shares. Profits and losses are the result of price fluctuations. In addition, the company pays out dividends. As the prices of shares and ETFs vary, the capital also varies.
- Options and certificates can also be traded with a small capital investment of a few euros. They are one of the most popular leverage products, especially among more conservative investors. Options are already available for a few hundred euros. The starting capital should be at least 500 euros.
- For futures contracts a larger financial leeway is built up, since the position sizes and ticket value are set quite high. Trading in futures is only worthwhile if a starting capital for trading in futures of at least 5000 euros is available on the real money account.
Who is Forex Trading suitable for?
Trading CFDs and Forex trading is ideal for private traders. Because the variable position sizes, which can be adjusted step by step according to the available capital, are advantageous here. This makes it possible that both small and large position sizes are possible. The Forex market is one of the most liquid markets in the world. In addition, there are many trends that can be followed, which makes Forex trading very popular with traders. Furthermore, the leverage in CFD and Forex trading offers the possibility of trading larger positions with a margin (security).
Serious providers with small and large starting capital
If you start looking for a suitable online broker for Forex trading, you will quickly realize that the choice is very large. However, you should make sure that the preferred provider is a reputable online broker with a low minimum deposit. Thus, after verification, you can already start in the world of Forex trading with little capital. Several online brokers require a minimum deposit of 100 or 200 euros. But there are also those who do not require a minimum deposit. In order to get a further overview of the capital investment, a closer look at the costs and fees should also be taken. Because there are also big differences.
Opening an account and depositing
Once the right online broker for Forex trading has been found, opening an account is very simple. It only takes a few minutes to configure the account. To do this, traders enter some personal data and whether they have already had experience in trading. Directly after registration, traders have access to the free demo account without making a real money deposit.
Before trading with real money, traders must verify their identity by uploading their identification document and proof of residence. Once all documents are accepted, there is nothing to stop Forex trading with small capital. Capitalizing the client’s account with the broker is free and can be done in real time. In many cases, various payment methods are available for this purpose, such as credit card, bank transfer, instant bank transfer and various e-wallets. If any questions arise, the support team can be contacted with confidence.
With how much capital does Forex Trading make sense?
Even though traders can open an account with an online broker for as little as 1 Euro, trading with little capital makes little sense. Rather, the question should be asked what is hoped for through Forex trading and what goals would be pursued. If you ask experienced traders how much capital is reasonable for Forex trading, you will get the answer that trading with a minimum capital of 500 Euros is only reasonable. It should not be forgotten that traders invest a lot of time. And speculating with a few cents on rising and falling prices is no fun.
In order to gain experience, you can easily start with less money. Once the acclimatization phase is over, the question should be asked what the primary goal of Forex trading is. In the end, the goal is to generate nice profits and this is only possible with more capital.
Read my other articles about Forex Trading:
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- Forex Signals experience – Worthwhile or not?
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