Trading the Forex market with a small investment

Joining the trading industry is very easy now. In the past, only the large banks, organizations and institutions were able to participate in the foreign exchange market. But things have changed a lot and brokers like Saxo are offering high leverage trading accounts to new Aussie traders. By opening a trading account with Saxo, you can easily secure your financial freedom and lead your dream life. But things are not as easy as it seems. You need a large amount of money to make your life better. Does this mean you can’t trade with a small amount of money? Well, the answer greatly depends on your trading skills.

Many professionals are making a good living with a small investment. They know the perfect way to place the trade in any market condition. This article is going to highlight the key factors which you need to consider to make a decent amount of money with a small trading capital.

Leverage trading account

The first thing which you need to use is a leverage trading account. Those who are making consistent profit in the Forex market knows the perfect way to use leverage. To make your life much better, you must effectively use the leverage. Learn about the trade management technique so that you can make the best decision in any market condition. At times, you will high-quality trade setups still you need to limit the risk exposure in every possible way. Forget about the aggressive trading method since it always results in heavy loss. To make your life better, you must understand the fact, leverage acts as a double edge sword. So, stop taking too much risk in a small trading account or else, you will lose money like the majority of the trades.

Work hard for precision

Those who trade the market with a small trading capital must focus on precision. Look for the best trading platform and use the premium tools to assess the condition of the market. Try to find trades in favor of the trend. Unless you are certain about a certain trade setup, you should never execute the trade. Focus on long term goals and try to limit the risk exposure in every possible way. Instead of using the indicators, learn the details of the Japanese candlestick pattern trading strategy. Look for price action confirmation signal at the key support and resistance level. Once you find the good trades, execute the trade with managed risk. Always remember, you have a small trading account and this means you can’t afford to make any silly mistakes. Be cautious with your trade execution.

Compound your profit

You might start trading with a small account but this doesn’t mean you will withdraw all the profit. You need to compound the profit so that you can scale the size of your investment. Withdraw 50% of your profit and reinvest the remaining amount. By compounding the profit, you can easily increase the size of your account balance. But some of the retail traders forget about the risk management policy while compounding the profits. They start taking a high risk to increase their account balance. But this will cost you a huge amount of money. Regardless of the size of your investment, you should never risk more than 2% of your account balance. Always limit your risk exposure so that you can stay in this game.

Conclusion

The size of your trading account doesn’t matter. If you manage to trade the market with proper discipline, you can expect to make a decent amount of money. Try to trade the major chart pattern since it will help you make big profits. Ride the market trend and use the trailing stops to maximize the profit. Focus on precision so that you can take the best trades with a very tight stop. Forget about your emotions and focus on logic to secure the best trades.

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