One of the most basic fundamental elements of trading and investing is that you need money to start. But what if you don’t have any money? Contrary to what many think, it is possible to get started with limited funds. In this article, we will touch on taking time seriously as a valuable resource, being smart about spending and making the most of what you do have. Here’s how to start trading with no money.
This blog is part of our new
Make It Happen
series, a series of blogs aimed at total beginners to forex: for people working a full-time job, with little capital to start off with, and limited time to learn how to trade. Sound familiar? Here’s how to get started on your trading journey.
How to Start Trading with No Money
See time as a valuable resource
Forex trading with no money can be a daunting prospect. It may seem that money is the most important resource when it comes to beginning forex trading. But the most valuable resource when you first start with forex trading is, in fact, time. Time is needed to learn and study the forex market and how to trade it effectively.
By using your time wisely and mastering the art of forex trading early on, you can help avoid many costly mistakes that traders make when they jump into the market too quickly. Their problem is that they have invested enough money, but not enough time – so actually, you might be at an advantage. Facing the hurdle of a lack of capital, you can do the opposite and focus your energy on the effective use of your time in learning the forex market and worry about getting enough capital later.
Struggling to find the time as well as the money? See our
tips on fitting forex around your day job>>
Practise smart spending
When you have limited funds, it is important to make the best use of the money that you do have. This means keeping track of where your money is going and identifying purchases that are not serving you well or are interfering with your financial goals.
At that point where you do have enough capital to begin trading, it is important to be careful with your limited funds. When you have a small amount of capital, that means that you can’t afford to lose as much as someone with more capital. This means that you must limit your risk to preserve your limited capital.
This demands a solid foundation of risk and money management, which are the knowledge cornerstones of any successful forex trader. By limiting your losses on a trade to a set percentage, such as 2% for example, you avoid the potential of a single trade wiping your small portfolio out. Setting a stop loss is an invaluable habit that can save you a fortune whether you are a big fish or a small fry.
Here’s how to set a stop loss – and why it’s important>>
Find a solution for a small amount of capital
Some brokers will not tolerate smaller traders and have high deposit limits and little flexibility in terms of entering smaller orders. That’s why this topic is so vital to beginning forex trading with little money. Many forex brokers require a large deposit to open an account. This large deposit serves as collateral against the leverage that a forex trader will use in his or her trading. Other brokers have low requirements for deposit and allow you to trade with very little capital.
But there are solutions to find something that works for you – for example, here at BluFX we offer a fully funded forex account, so you don’t have to put any of your own capital at risk, and you pay a set amount each month for access to that account –
£99 for a $25,000 account. This will give you access to the forex market with a UK broker, regulated by the FCA (Financial Conduct Authority). You have no trading loss liability and you split profits 50/50 with BluFX.
These accounts give you the ability to trade a fully funded account without having to put your own capital at risk. Since you split profits 50/50, you will gain when your account registers a profit and the downside risk of trading losses is eliminated. So if you’re a new trader, or needing capital, this might be a good option for you.
So: can you start trading with little money?
The short answer is yes – you can start trading forex with little money. The myth is that you need a lot of money to trade in the forex market effectively, and while a lack of capital can present a barrier, there are some positives that come with it. While money can be an important factor in forex success, there’s no reason you have to start with a lot of money. When first starting out, time will be much more valuable to you. It is vitally important to use your time wisely and learn the forex market before diving in. Education is the key to success.
When you finally do have the capital you need to trade, you will be able to preserve your capital and maximize your profits by avoiding many common mistakes that are often learned the hard way. Mastering the fundamentals of risk management and money management will help you preserve the capital you do have and help you avoid many speedbumps that may sideline other less prepared traders. Finally, find a broker that fits with your situation as a low capital trader. Do not feel like you have to deposit a lot of money to get started: there are forex brokers that allow you to open an account with very little money, so it’s all about finding something that works for you at the beginning. You can do this!
Stay tuned for more in the
Make It Happen
series for practical tips on learning forex as a total beginner and getting your head in the trading game…
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How to Start Trading Forex With No Money
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