There are many forex brokers that allow traders to open various types of real accounts at various prices. Starting from a minimum capital of 5 dollars up to 1000 dollars according to the account type of each broker.

So what needs to be considered when setting a minimum capital for trading? Here are those tips

Risk Management

As a novice trader, it is obligatory to understand well how to manage risk before trading. In theory, it's a good idea to transfer 1 percent of the funds from the total trading account balance for every 1 transaction. Thus, traders must close orders when they have reached a loss of 1 percent of the balance. For example, if you deposit a balance of 100 dollars, you cannot lose more than 1 dollar in one transaction.

By applying this risk management, the capital will not lose too quickly when experiencing a loss. However, the profits obtained tend to be very small.

Use Stop Loss Order

When trading, there is a feature that can be used as a reference to determine how much capital is at risk, namely a stop loss order. A stop loss order is an automatic feature that makes a transaction close when the price position reaches the upper limit or vice versa.

When executing a buy and predicting that the market will move up 10 pips for example, traders can set a stop loss order to stop when the market price has reached ten pips above the nominal open order.

By placing a stop loss order, traders can determine how much deposit to place on the account. traders can make an initial deposit of 100 dollars, the risk of loss is 10 pips with a nominal transaction of 0.1 dollars and so on.

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