Making money trading with a small deposit is no more fresh news. Still, there’s an issue in the efforts that should be made to trade with low amounts while growing the investment portfolio.
Most beginners have 10-150 dollars, which is not enough even to open a transaction on EUR/USD. The minimum purchase volume is one percent of 100 thousand euros, which means 1200 dollars. And here comes leverage – the tool used by millions of traders. This article will tell you how to trade with a small deposit and tips to make a profit.
How to Trade with Small Deposit
Trading is often beneficial when it is combined with alternative jobs. A person with an accounting education can earn $3000 per month (on average). Accordingly, a trader should not make less for the trading to be considered profitable. You can act in two ways:
To increase the deposit up to $3000 and trade with 100% profit
Deposit $100, expecting 800% profit
A trader can take advantage of the third option, using the leverage of 1:10 or 1:100. This way, $1,000 increases to $100,000, and a 10% profitability becomes an expected result. Though, given the turnover, you will have to use at least 1:100 to stay afloat throughout all trades.
Let’s Explain It in Layman’s Terms
Trades with 5% of the deposit with a small amount will not bring enough profit. The minimum lot for popular Forex instruments is too high, so you need to use leverage.
Here it is vital to choose a suitable broker, while a brokerage company needs to provide sound leverage to a user. Even if you decide 1:500 leverage with $10, 5% of 5000 is $250, which is not enough for the EUR/USD lot. Meanwhile, the risk of losing money rises along with a leverage size. It means that if you lack experience in Forex trading, leverage is not the best solution to opt for.
Small Deposit Trading Tips
It is challenging to work with tens of dollars, but it is possible if you:
Stop deep drawdowns. A small deposit will not withstand the drawdown, which is why you have to use stop loss and take profit functions.
Don’t try to invest in the long run. Profits with small deposits should be made quickly and not in the long run. Scalping and swing trading are top choices.
Use safe and low-risk strategies. A Martingale strategy is not the way out for $10-150 deposits.
Finally, if you plan to succeed in trading, read and watch educational materials. What’s more, opt for a brokerage that offers professional trading software only. For example, Profit Center FX has developed IT solutions for a brokerage for more than nine years and launched 200+ Forex projects in 9 countries. Using that kind of software, you can rest assured that all your trades will be fast, precise, and sound.