You need to come at this from a different angle I think yourself it can be a little bit like asking how long is a piece of string but it's all to do with risk and it's really critical if you're starting with a relatively small amount of money that your broker let you trade small to keep your risk management at sensible levels, but I think the easiest way of explaining this I'm going to go through a few points first of all then I'll show you on the trading platform what I'm talking about and hopefully from that you'll get an idea of just how much money you need personally if you want to start trading Forex:

·     One of the biggest mistakes that new traders make is risking too much money on individual trades.

 

This is just simple math’s of course if you're risking let's say losing 20% of your account if you get stopped out of a trade if you have 5 losing trades on the run which from a probability point of view is completely possible you're going to wipe your account out

 

·     Sensible approach to risk management and most sensible approaches suggest not risking more than 3% of your account on any one trade idea.

 

so what does this mean if you have for example let's use a big number 10,000 pounds in your account if any trade goes wrong and you're sticking to the no more than three percent of your account rule then if any trade goes wrong you should only lose 3% you go 10,000 Pounds in this example 300 Pounds.

If you’re an aspiring world best ECN forex trader, then you’re probably wondering how much capital you want to get started. People who go into forex do that to earn a great amount of cash. So, the question is, how much money should you spend on forex trading to make an substantial return? There isn’t an exact answer to this since there are dissimilar types of trading, each with their motivation, goals, and leverages. Today's currency exchange market offers an unlikely selection of Forex Trading Platforms as they are so much in required by traders across the world.

Of course, it won't assurance you the successful, but it has to be suitable to your individual trading style, traits of character and level of expertise so that you pursue your aims without a hitch. we also recommend to read our guide Best ForexTrading Platforms.

 So this way your being a relatively low level of financial risk on each trade and if you have a series of losing trades it's not going to do massive damage to your account so you really need to think when you start trading when it comes to how much money you're going to start with what's the smallest my risk per trade could be.

  •   For example of course if I have a thousand-pound account your risk on any one trade using this method should be 30 pounds.
  •     How small your broker lets you trade is clearly a key factor here.

Let's jump on to the trading platform we'll look at some sample trades and the typical risk will be willing to take and what that means from a financial planning point of view how much money would we need in our account.


let's take the EURUSD as our example here so I'm on the Encore Capitals forum let's say I'd like to buy it with a 50 point stop and I'm going to do the smallest trade that Encore Capitals let me do let's set that up by clicking on buy so if I click in the size box here I can see that I can trade from as low as a1000 let's just set that up and type a 1000.




let’s just set that up and type a thousand into the trade size let's say I've decided that for this trade a 50 point stop-loss is the level of stop I want so I'll choose close at loss and I'll choose close if price goes down by 50 points so here we go so just to summarize here I've got a 1,000 position EURUSD that's the smallest I can trade my typical stop-loss for EURUSD maybe 50 points from where I get in so there's my stop so in this example my loss would be 3.83 pounds so if I'm risking if I only want to risk 3 % of my account I need to have just over a 100 pounds in my account to do this trade the actual number here is about 128 pounds so 3.83 pound is 3% of 128 pounds so I can start with a relatively small sum of money with Encore Capitals because I can trade small size and still keep that risk to a few percent of my account balance.

 

So it's very easy even with small account sizes to keep our risk to a sensible level as a percentage of the overall account on individual trades that we do so you can see how critical it is when trading with smaller accounts that your broker lets you trade sort of micro size to make sure you're practicing sensible risk management so I hope that makes it clear it's all a question of risks can the big mistake like I said though that most people make is risking far too much on any one trading idea if you're risking twenty percent thirty percent of your account you are going to have a run of losing trades and the risk is you're going to blow your account up but you can if you have the right sort of broker trade at a level where you're trading really small if you have a relatively small amount of money but you're practicing sensible risk management so even if you have a run of losing trades you know it shouldn't damage your account too much so how big you can trade is really important if you're starting off with maybe a few hundred pounds to keep those risk management parameter parameters at a sensible level

 

so we hope that makes it clear it's all a question of risks can the big mistake like I said though that most people make is risking far too much on any one trading idea if you're risking twenty percent thirty percent of your account you are going to have a run of losing trades and the risk is you're going to blow your account up but you can if you have the right sort of broker trade at a level where you're trading really small if you have a relatively small amount of money but you're practicing sensible risk management so even if you have a run of losing trades you know it shouldn't damage your account too much so how big you can trade is really important if you're starting off with maybe a few 100 pound to keep those risk management parameter at a sensible level.

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