Are you new to the trading world and ready to make the transition from a demo account to a real live account? Like many beginners, the question is how much money will I need to start the journey. This post will go straight to the point and give you an idea of what to know.
Before you start trading it is important to focus on learning, learning more and practising the skill. Next, put in hours and hours of practice with a demo account till you feel you have a strategy and are profitable. Being profitable is having a streak of more wins than losses consistently for a long duration. So let’s say you have done this and are ready to move on to the next stage. That’s moving on from using a demo account to a real and live trading account. It will be advisable to use an amount that doesn’t mean much to you, one you are willing to lose. This amount will vary per person but if you can lose one hundred dollars ($100) or equivalent start with that. For someone else, this amount could be less or more.
Trading a 0.01 lot size to grow your account
Start with one hundred dollars and use the 0.01 lot size. Doing this prevents you from blowing your live trading account with one trade. Practise taking out trades and sticking to your plan. Yes, you need a plan and you’ll need to stick to it. Trading is said to be a get-rich slow method, doing otherwise can lead to not sticking to plan and over trading, which will lead to losing everything.
You really need to have a plan and a strategy to prevent you from jumping into every trade. When you have a plan, you wait for your setup and stick to your risk management. This will help you build consistency, and master your psychology and emotions.
When you are doing this and everything is going well, meaning you have grown the account from about one hundred to two hundred, you can now add more or just keep growing it. Just don’t go crazy and throw your whole life savings in there.
Losses are part of trading so don’t be afraid of failing, let failure teach you a lesson and don’t give up. Go back to the drawing board, backtest and learn more. All the best in your trading journey.
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Online trading is becoming increasingly popular, with Modern Trader reporting that the number of global online traders has grown from 9.5 million four years ago, to more than 15 million today.
Dany Mawas, Regional Director at INFINOX, a leading CFD and FX broker with an international presence including in Africa, attributes this growth to technological advances, which makes trading convenient and fast. Traders can now trade from anywhere and at any time and will get quick, easy access to the markets.
“Apart from the potential of achieving lucrative financial returns, additional benefits of online trading includes greater financial knowledge and developing associated skills with trading like discipline and emotional control,”.
Dany Mawas
How to start online trading
There are those that are apprehensive about starting online trading, due to the associated financial risk. To put them at ease, Mawas notes that while fine-tuning trading skills comes with experience, the best way to start is to open a demo account with one of the many online trading partners available today.
“A demo account is a simulation account that provides users with the opportunity to place trades and to become accustomed to how markets move,” he says.
Additionally, some online trading brokerages provide bonus incentives to boost traders initial deposit and give them a better platform to start on. With INFINOX, traders are only required to deposit as little as US $50 and will, in turn, receive an additional US $25 bonus. Meaning that 33% of their at risk capital is the bonus.
However, he points out that traders should also do their due diligence when selecting the brokerage to partner with and not only base their decision on the starting bonus. “This includes investigating where the brokerage is regulated, and ensuring it has a physical presence instead of merely being an online entity,” says Mawas.
Determine your plan of action
Mawas notes that although there are several game plans that beginner traders can adopt to gain profits on their investments, the old adage of ‘over-analysis leads to paralysis’ couldn’t be more true. “When developing a strategy it is vital to spend time researching and learning what works best. The more you perfect managing your risk, the better you become. If I could give one piece of advice, it would be to start simple and keep it simple.”
Mawas emphasises that trading is a humbling experience due to its binary outcome of either making the right or wrong decision. “As such, it is important for traders to have emotional control and the willingness to learn from their trading mistakes.”
Being emotionally invested can be detrimental to success, he adds. “Often, when the market dips, traders will make the emotional decision to continue trading in the hopes that they recover quickly, which often doesn’t happen. It’s imperative to assess each situation for what it is and to make the most informed decision.”
Why trading is more accessible
Current affairs such as COVID-19, the U.S election, and Brexit have prompted people to stay more up-to-date with current news, says Mawas. “This is important as the outcomes of these events have an effect on the markets. Nowadays people are more clued up than they think they are when it comes to knowing what is happening and what could impact their trading. This knowledge makes trading more accessible for those that wish to start.”
He also states that the internet is full of useful information for new traders to digest and that websites such as IX Intel offers manuals and how-to guides to help traders learn the basics of a successful trading career.
Mawas points out that the rise of social trading has also increased accessibility for beginner traders. “Social trading apps such as IX Social, allows users to access all the financial markets at their fingertips with the added bonus of tapping into other traders’ knowledge. Users can auto-copy top traders and receive the same results that they do.”
“Today, online trading is an easily accessible journey, and anyone can be successful if they use the right tools and spend time developing the necessary skills and acumen,” concludes Mawas.
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