As forex becomes more and more popular there is one common problem most new entrants have to face; the lack of sufficient capital. The majority of new traders will fund their very first forex trading account with less than $1,000 which will cause several problems for those forex traders from the start. In addition it will put them at a disadvantage in comparison to their peers who managed to sufficiently fund their trading accounts.
New forex traders need to keep in mind that trading is a long-term process of learning how to trade, developing a strategy and growing your trading portfolio over time. While you may deploy a short-term strategy your overall focus should remain on a long-term base as you want to grow your wealth as you trade.
Here are some problems you may face when you trade if insufficient funds:
Inability to execute your trading strategy
Inadequate risk management
Low earnings despite proper trading strategy
Don’t panic and enjoy the following 3 tips on growing your forex portfolio:
First Deposit – You should only trade the amount of money you can afford to lose as a trader, but make sure you make a first deposit with all the available funds you have for your first deposit. You want to stand on firm ground as you start. Please not this comes after you feel confident with your trading skills and after you perfected them in a mini-account with a small deposit.
Deposit Bonus – This is only suitable for long-term traders who do not seek to make a withdrawal within three to six months of their first deposit. Those of you who plan on reducing your trading capital please skip this step as it is not suitable for you. Read the terms and conditions and understand them before you accept any bonus, but once you have done you may take advantage of this option on your first deposit only.
Deposit Plan – Create a monthly plan where you will continue to make smaller deposits every month and skip the deposit bonus. This will allow you to grow your account further until it reaches the appropriate size. Again, building a forex portfolio requires time and patience just as it takes with your forex trades.
Here is an example:
You have $500 for your first deposit and after you open our account you take advantage of the first deposit bonus which will allow you to start trading with $1,000. Every month you are able to make a deposit of an additional $100 which means an additional $1,200 over a twelve month period. This means you can have a potential $2,200 to trade with if you have the discipline to build your account.