How to start trading in Forex. Initial deposit

28.01.2021

Feature articles

In 2021, everyone can afford to trade in Forex, even without any initial capital. Brokers provide a wide variety of bonuses and special offers that allow traders to enter the market and start making money from scratch.

Where to start with trading? First, you need to remember that on Forex, the currency you trade isn’t measured in money, but in lots. 1 lot is equal to 100,000 units of the base currency. Let’s take the most popular par EUR/USD as an example, 1 lot = 100,000 EUR. Most individual traders don’t have that kind of money, but you can trade odd lots. The minimum trade volume is 0.01 lots, or, in our case, 1,000 EUR, but even this can be a very significant amount for a beginner in trading. Is there a solution? That’s where leverage comes into play.

Leverage

Brokers provide their clients with a margin lending service that allows trading without large amount of funds in the account. Leverage is a financial tool that makes it possible to place trades in amounts larger than one’s deposit. If you are a beginner and you have less than 1,000 USD at your disposal, but want to enter the market, the broker will lend you the rest. 

If the trade is successful, the money returns to the broker. But what happens if you lose? Of course, the broker doesn’t want to lose its money, so when a trade is placed, a loss cap equal to the amount of the trader’s margin is automatically set. When the trader’s loss approaches this value, the trade is closed, while the broker receives its funds back. This unpleasant situation is called a margin call.

Leverages may vary, its size depends on the specific financial instrument and its liquidity, as well as on the dealing policy of the broker itself. Leverage is the ratio of the trader’s funds to the amount loaned by the broker. For example, a ratio of 1:100 means that the broker is providing a loan for an amount 100 times the trader’s deposit.

So how much money does it take to start trading in Forex?

You don’t even need to have a deposit in your account to start trading! All you need is to register on a broker’s website and create a demo account. Of course, in this case, we’re not talking about making money, but this way you can get a general idea of the market and the trading process. To start making real profit, you need to make a significant initial deposit. Its size directly affects how much and how fast you can earn in Forex. No matter how talented and experienced a trader is, they will hardly be able to turn 10 dollars into a million.

Minimum deposit

In theory, you can start trading in Forex with just $1. Some brokers offer a minimum deposit of $1, but in reality it makes no sense. The smaller the deposit amount, the bigger the leverage, and the easier it is to lose the deposit over the slightest market fluctuations. A small deposit also means larger fees for the trader. Moreover, some strategies (e.g. scalping and pipsing) require larger deposits. And, of course, it is impossible to learn how to manage capital for $1.

To access all the market opportunities in full, $10 is enough. This is the minimum deposit required in Micro accounts offered by Grand Capital. It’s still too early to talk about serious earnings, but with cent accounts you can learn the basics of trading and test your trading strategies. Like demo accounts, they are indispensable for a novice trader, because they enable you to trade with real money, but without serious losses.

A minimum initial deposit is not the perfect option for everyone. To determine an optimal starting deposit, take into account a number of factors: your trading method, account type, preferred strategies, leverage provided by your broker, the desired amount of profit and the permissible loss. These factors are often interconnected.

Optimal deposit

Traders who want to make serious money should be ready to put in a larger initial deposit. In all accounts offered by Grand Capital (except Micro), the minimum deposit is $100. With this amount, you can already expect a noticeable income. At the same time, the potential loss will be disappointing, but not crucial. With $100 in deposit, you can safely trade in micro lots (0.01 lots) and test almost any trading strategy. It is better not to deposit more than $100 into the account if you’re a beginner in trading. Even if you are confident and have successfully traded in a demo account, the risks are still very high.

When you learn to build upon your initial capital of $100, you can invest larger amounts: $1,000 or more. This sum is sufficient for trading any instruments, can withstand a drawdown, allows hedging risks of volatility in currency markets thanks to commodity CFD trades.

A good profit is around 10–30% per month. You can calculate the size of your deposit based on the desired profit.

Conclusion: the optimal size of the initial deposit for a beginner is about $100. To make good money on Forex, you need to invest $1,000 and more.

How to make a deposit?

After you register, a Standard trading account will be created for you automatically. Make a deposit using a bank card, a payment system, or cryptocurrency wallet. 

A deposit can be made in a couple of clicks in your Private Office or in the Trading tab > Deposit/Withdrawal".

 

 

If you’re depositing via a bank card, you’ll have to pass the verification procedure and provide all the necessary documents required by the processing system.

Choose the method and amount of deposit, specify the details, upload your identification documents, and that’s it! You can start trading.


 

Deposit bonuses

After depositing funds, be sure to claim Any Deposit bonus + 40%, or other numerous bonuses offered by Grand Capital. What’s the deal?

  • The profit gained from trading the bonus funds can be freely withdrawn.
  • Over time, the bonus becomes the property of the client at a rate of $3 per 1 lot.
  • The bonus can be renewed every 6 months by depositing at least 10% of the initial amount.
  • The bonus can be used to cover drawdowns.

Just choose your trading strategy and we will take care of bonuses for your trading plans.

Start trading

Author: GC
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