These days, $100 doesn’t buy much, however, if you took a $100 and trade Forex, you would be starting a side hustle for yourself. A successful trading plan is all that you need to trade forex with a $100 and hit on that dream jackpot.
At the same time, if you plan to get into the forex trading market, and learn about the industry, with a few wins and losses, then, $100 is a good start. Whatever your intentions are, a viable trading plan is a better and more logical move to trade forex.
Trade Forex, but, do your Market Research first.
In the financial markets, forex is the market that holds the top trading positions. Once you nurse the idea to trade forex, you should learn about the market and trading. This increases your exponential success and reduces most risks.
If your intention is basically to gamble with your $100, then, you can use an online trading platform to enter orders. Even though you are gambling, you need to still learn how to do the latter.
read also: Foreign Exchange Market for beginners.
Without mincing words, any level of long-term success requires knowledge about currencies. And you have to learn about the various factors that are likely to influence their overall valuation.
On the internet, you are going to find a wide range of information for beginners. There are ample educational resources available for you to learn how to trade forex before risking your $100
Forex Market Research Methods.
There are 2 principal analytical market research methods for traders you should know. They are the fundamental and technical analyses associated with forex trading.
The fundamental analysis trains you to understand the impact that economic releases and news has on the market. The value of a currency is associated with the nation’s economy and geopolitical situations. You need a broad knowledge of fundamental analysis to get an edge when you trade.
The technical analysis is dependent on charts and computed technical indicators, which keep you informed about the various levels of supply and demand in the market. It tends to help you predict a currency’s future movements. With technical analysis, you’ll learn about a currency’s trading volumes, support, and resistance levels.
A demo account
A demo account is given to you by most brokers so you can use it to understand market conditions, without having to make any deposit. Charting and indicators accompany the demo accounts, which will help you get a feel of the market, without committing any of your money.
Move into a live account
Once you understand the nitty-gritty of the trading world, you should move to a live account. Go ahead, fund an account, start trading, and learn to deal with the emotional swings of losing or gaining money. Fortunately, with the trading plan that you created using a demo account, it’s possible to get started on the right grounds and move up in profits.
In as much as you are wrecking in profits on your trades, it’s important to review your strategy as a beginner. You should avoid taking large losses, by developing sound money management. Also, as a beginner, resist the urge to trade more than one currency pair. The reason is that each currency pair had an underlying fundamental that differentiates its trading power from the rest. Instead, you should focus on currency pairs that have high liquidity and tight dealing spread like the Euro against the U.S. dollar (EUR/USD). This pair is the perfect trading vehicle for you to start with your $100 account.
Review your budget
Starting your journey into the world of finance, and deciding to trade forex is a good decision. At the same time, starting with a $100 is a great step too. Even so, you have to review your trading budgets from time to time. Until it’s wise to expand your investment, it’s advisable to stay within the $100 limits. When you succeed, you might re-invest the profit, or cash out. Always leave the amount of money you are comfortable about losing in the rim. This way, you wouldn’t be affected by losses too much.