Page 139 - Ultimate Guide to Currency Trading

Proportionate-Sized Accounts

The first element to trading currency in a low risk/low return style is to limit the amount of money you
are actually trading. The facts are that you will only be able to lose the amount that you have in your
account. To explain it further, in a worst-case scenario, your losses will never exceed your account
balance. It is quite possible to make a good profit on an account that has a balance of as little as $250.
If you need to or want to you can start with a balance with a smaller amount of $100, and still enjoy
the thrills and excitement of currency trading.

A $250 or $100 account can be very fun indeed! For the price of a fancy dinner you can have a
profitable and productive FX-trading account. You can spend your evenings scalping or setting up
overnight trades just like the bigger currency accounts, and you can make money to boot! It is quite
possible (and very common) to earn an average of $10 per day in a $250 account with very gentle
trading. In fact, this amount can be earned with three or four trades a night.

Don't let the size of your account limit the fun you can have from currency trading. Not
only that, don't let a small-sized account let you begin on the path of not respecting
ALERT the markets. If you don't take care you could still lose money in the account; in fact
you could wipe out your small fledging account quickly. Take care with whatever size
account you have!

There are tales of college students spending the wee hours of the night trading in the currency
markets with very little money in their accounts. These ultrasmall account holders use PayPal to put
money into their accounts in the evening, and then spend the night currency trading. They set up
trades while studying and otherwise spending the night in front of the TV. When the morning comes,
they again use PayPal to move their earnings out of their accounts. They go on to use this money for
their morning coffee at the local hangouts and snack shops.

Clearly this is an extreme case of the small account FX trader. You will not have to trade all
night for your lunch money. You can, however, fully enjoy your weekly and monthly earnings with
whatever size account you have. Some people find currency trading with a small account more enjoy-
able than if they had big money on the line. You can take the approach that winnings are winnings,
and find the comfort in risking smaller amounts that are more to your taste. There is no rule of how
large or small your account should be; it is the percentage of your gains that will bring a smile to your
face. If you think about it, that's precisely the reason some Forex brokerage firms will allow your
account balance to be as low as $1!