Being a beginner in trading is a nerve-wracking feeling. Of course, the thought of making a profit is the main reason people try in the first place. However, it is the fear of losing it all that stops many from even trying. So, what do you do? Well, the age-old saying; only invest what you can afford to lose, comes into play. So, in this article, we will run through how to trade Forex with $100.
The thought of losing even $100 can provoke some pretty bad feelings. However, if you have it spare, and think about what you could do with it otherwise, you would find that it is only the cost of a meal for two in a restaurant. You don’t get anything from that other than a full belly, and a memory. If you trade well with it, you could earn a lot more money, and best of all, experience to keep forever.
How To Trade Forex With One Hundred Dollars
Before we get into the actual trading strategy, you need to understand that you are not going to become a millionaire from $100. You are even very unlikely to make thousands of dollars, in fact, I would like to tell you that you won’t. There is no benefit in looking at the trade in an illogical and unrealistic way.
What it will do, though, is help you get a feel for the markets, and understand where to put your money, and when. If you get a profit then that is a bonus. What we do need to remember though, is that one hundred dollars is not a lot of money within the Forex system. That makes it pretty difficult to know what to do with it. There are two main options that you have to start out:
- Practice as if it were your job.
- Make an investment.
While you may lose all of your money with either of these options, they both have their advantages. We will go through them in the next sections.
Practice as if it were your Job
This option is the one that most people will think of when they are considering how to trade Forex with $100. The idea is to trade with is as though it was a huge sum of money. Act as though you are a fund manager with the money, and look for small growths to take advantage of. Although I do not like to use the word pretend when you are dealing with money, you need to act as though trading with this money is your full-time job.
It is a good mindset to get into thinking that the trading money is not yours – as though you were doing it for someone else, and your livelihood depended on making the right decisions.
One of the first steps you need to do is to look for brokers that do not have a minimum loss size such as Oanda where you can buy or sell one unit. Other brokers include; FBS, XM, FXTM, etc. They all have slightly different terms and minimum loss sizes, so make sure that you look around for the best deals.
Some of the things that you will learn through this process are:
- Building a strategy. – There are plenty of strategies that you can find to try and see which works best for you. If you would like to know more about Forex trading systems, read our article here. Try to find a strategy that will suit your own abilities and styles as best as you can. Although some may seem more profitable than others, if you do not suit them, you will find yourself losing all of your money very quickly.
- Money management. – The more you practice with real money, the more you will feel the joy and disappointment that comes with trading for real. Even if your losses or profits are only in cents, you still feel them. That is a huge step into gaining confidence in money management through Forex trading. You will learn to be more careful with your trades, and look for good opportunities to gain low amounts of money back at a time, instead of risking large sums in one trade.
- Mindset. – Both of the above points, strategy building, and money management, will help you gain the right mindset to trade with more money. The longer that you can trade Forex with the initial $100, the better. You will gain experience in a way that you cannot teach. That midsel will translate very well into larger sums of money when you feel comfortable in doing so.
One of the largest mistakes that people new to Forex make is to go too quickly. They do not plan any type of strategy, and if they do, they do not stick to it. That makes it very easy to lose all of the money that you have put into the broker, and come away from the experience deflated and unwilling to try again. Therefore, it is best that you create a strategy before investing your $100, and stick to it as closely as you can.
How To Trade Forex With $100 – Invest
The other option is to invest in yourself. Use the $100 to buy books or a course, and learn from them. Subscriptions such as Audible will allow you to listen to a lot more books than you could buy for the money, which will give you a broader insight into how trading works, and what you need to do to be successful.
We have an article about the best Forex books for beginners, and they are a great place to start. However, the most important thing to remember is that you need to apply the knowledge that you gain. You can learn everything there is to know about Forex trading, and never apply it because of fear, or worry. You will never become wealthy through Forex if that is what you do.
Conclusion – Trade Forex With $100
As you have seen, there are two main options that you have for trading with such a small amount. The problem with both of them is that no matter which you pick, you will need to complete the other one. So, maybe the best option is to learn which strategy is best for you through free research via the internet and then buy a good book based around the specific strategy. Then, you can put the rest of your $100 into the practice section. If you make the money back for the book that you bought, then you are already in profit.
Remember, take it slow, there is a lot of risk in trading.