Forex Trading $50 – Can You Really Make Money With $50?

Forex Trading $50 – Can You Really Make Money With $50?

Most people understand, on some level, that you can make significant money trading the financial markets and in particular, forex. Many are aware of the numerous stories of how individuals have become quite wealthy from trading the global currency markets. In fact, trading global currencies is how renown investor George Soros made his fortune. But there are many people who believe that you need a large amount of money to start trading which keeps them from even thinking of trying to trade online. However, this is definitely not the case and in fact, you can even start day trading with as little as just $50.

 

The good news is that if you only have $50 to invest in trading forex, you can still get started with that amount. Most retail Forex brokers only require a small amount as an initial deposit to start trading on their platform. In fact, many brokers do not require any specific minimum initial deposit amount. Even if you can afford to invest more than $50, it is still not a bad idea to start with a small amount anyway in order to first learn the basics of trading the forex markets before you start investing your hard-earned cash.

 

Also, you do not have to think of this initial investment amount as an end-all to investing. This can be just the beginning of your trading journey. You can always invest more when your skill level and knowledge increase and when you can obtain the available funds down the road.  

 

When trading with an online broker, you can also enhance your profit potential, even if you have a small amount of trading capital available, through the use of leverage. However, leverage can be a double-edged sword, since not only does it increase potential profits, it can also increase your risk of large losses. Therefore, be sure to educate yourself on how leverage works, which will be explained later in this post. So, let’s get started.

 

Forex Trading with Only $50

Use a Demo Account

One way to learn the basics of trading the currency markets is to not trade any real money at all but instead, to use a demo account to practice your trading. Most brokers will allow you to have unlimited use of a demo account when you register. This allows you to trade with virtual funds against real-time market movements and price action. 

 

In this way, you will be able to figure out how everything works on the forex broker’s platform. You can experiment with the various features available and discover how the basic functions operate on the software interface. Also, this is a good chance to formulate and practice your trading strategy as well as discover how much risk you will be taking.

 

Start Trading Live

Once you feel comfortable with how the trading platform works and how your trading strategy can be applied to different market conditions, you will be ready to start day trading live with real money and start making real profits from forex. Simply deposit your $50 as trading capital and start executing trades. It really is that easy.

 

Using Leverage

The reason people do not think they can day trade with just $50 is that it is a small amount of money. If you were just straight-up buying a currency pair and holding it, such as the EUR/USD pair, $50 would not be much at all. However, through the use of leverage, you will be able to control a larger market position than you normally would with just this small amount of capital.

 

Using leverage is essentially borrowing money from the broker in order to fund larger positions in the market. In order to take advantage of leverage offered by a broker, a trader will be required to deposit an initial amount of margin. The smaller the required margin, the more leverage and the larger positions you are able to control with your $50.

 

For example, if the required deposit is 1% of the value of a transaction this would mean your required margin is 1%. In this case the margin-based leverage offered by this particular broker would be 100:1. Therefore, if you are trading with an account with $50 in capital, you actually have the power to control $5,000 worth of capital. If the margin requirement were only 0.25%, the broker would be offering a 400:1 margin-based leverage. This would mean your $50 deposit would be able to control $20,000 worth of capital in the market.

 

Margin trading allows you to significantly increase profit potential, but it also increases the risk of loss if you are not careful. However, you will always be able to control how much risk you take by regulating the position size of your trades. With more leverage comes more power to trade larger amounts of capital, but that does not mean you have to exercise this power to the fullest extent with every single trade you make. You can and should always customize your position sizes to fit your own individual tolerance for risk. 

 

Take Your Trading Seriously

Even if you are just depositing $50 just to see what trading Forex is like or maybe to experiment on a new trading strategy, you should always take your trading seriously. This will allow you to perfect your strategy and sharpen the execution of your strategy. The bottom line is if you are able to make consistent profits trading forex with just $50, you can do the same with $500 or $50,000 through using the same exact strategy. 

 

Avoid trading with a risk level you are not comfortable with. The amount of acceptable risk will depend upon the individual. It is better to look at trading from a bigger picture point-of-view and aim to make money consistently over time rather than try to make a whole lot of money right away within a short period of time. If you are able to make 25% in capital gains over a year with $50, you will be able to achieve more success and profits with $5,000 or $50,000 with the exact same strategy.

 

Choosing a Trading Strategy

Even with just $50, it is important to find a trading strategy that works for you. Also, you may not want to consider only day trading. There could be many other types of trading strategies that may work for your situation. 

 

The strategy you choose will depend upon how much time you are willing to devote to trading activities. Some trading strategies require you to pretty much trade full-time, while other trading styles allow you to maintain a full-time job doing something else while you trade part-time. Also, other strategies will allow you significant flexibility in how much time you spend trading. Either way, whatever trading strategy you select to utilize, if it is a successful strategy for you with a small amount of capital, it will be successful with a larger amount of capital. 

Trading Strategies

The following are some potential types of trading strategies that you can choose to use to trade forex online:

 

Day Trading

One trading strategy option available even for those with only $50 to invest, is day trading. This type of trading style involves entering and exiting trades generally within a single trading day. In order to utilize this style of trading successfully, you will need to be knowledgeable about technical analysis, which is the analysis of price chart patterns and special technical indicators which are usually included in a broker’s trading platform. You will also need to have some understanding of fundamental analysis, which is the analysis of economic factors affecting market direction. However, you will especially need to be aware of when influential economic data releases and other market-moving events are expected to occur which can create significant volatility in the markets. 

 

In all reality, eventually, if you are looking to make a living from Forex trading using a day trading strategy, you will at some point need to trade full-time and will require much more capital. But, if you are simply investing $50 initially to learn and experiment with day trading, then it would be a reasonable way to get started. Once you start consistently making profits with day trading you will be able to confidently start trading with larger amounts of money. However, you will need to find a solid, reputable forex broker before you are even able to start trading with your initial small amount of capital.

 

Position Trading

Another popular trading style is position trading which entails holding a market position for an extended period of time with the expectation that the market will eventually move towards its full potential value. The amount of time a trade is held can range from a week to a few months with a position trading strategy. Like the day trading strategies, position trading will generally require a combination of technical and fundamental analysis. However, the emphasis will more significantly weigh on fundamental analysis usually. 

 

Even with just $50, you can use this type of strategy to start trading. This trading style will arguably require more patience since you may have to hold a position for up to a couple of months or even longer. However, if you are able to be patient enough to consistently earn profits with minimal losses using just $50, you will certainly be able to do the same with larger amounts of capital as long as you are able to find a reputable broker with a solid trading platform.

 

Swing Trading

Investors who use swing trading strategies will perform analysis of specific parts of an established market trend. Usually swing trading styles will have you maintain open trades for as long as a few days to even several months, which is similar to position trading. Swing trading is also another style of trading which can be practiced with only $50 of trading capital. Also, like just about most other styles of trading, if you are able to be consistently profitable with just $50 swing trading, you will be able to implement the same exact strategy successfully with $5,000 or even $50,000. 

 

Finding a dependable Forex broker will be the first thing you need to do to start your journey towards success in the currency markets. Be sure to find a broker that provides a trading platform that has all of the features you need to swing trade. Also, the software interface should be user-friendly and intuitively designed. Other features to look out for include effective trading tools, educational training resources, secure banking options and professional and responsive customer support. 

 

Scalping

Another common trading style is scalping which involves traders capitalizing on small fluctuations in the market. Usually, the trades will last anywhere from a couple of minutes to up to an hour or so. This type of trading style, similar to day trading, will rely heavily on technical analysis. Fundamental analysis is generally a minimal consideration but can sometimes determine the general direction of the market. Scalping works best with the most liquid of markets because these markets generally offer the lowest spreads. Spreads are important because, with a scalping strategy, you will be executing numerous trades per day which means a wider spread can quickly eat away at your profit margins.

 

Scalping is a good option for those who only want to invest as little as $50 of capital. You will be able to adjust your position size in order to match the smaller amount of funds. Also, using leverage can maximize your potential profits. Additionally, just like most other types of trading styles, if you are able to consistently profit with a trading strategy with just $50, you will be able to do the same with larger amounts of capital. Therefore, starting out with just $50 is a good way to get started while gradually increasing the amount of capital you trade with as your experience accumulates and your confidence grows. 

 

When looking for the right broker to provide a trading platform for scalping, you should pay close attention to the spreads being offered on the most liquid markets. Also, you should consider how much leverage is being offered. Of course, only choose Forex brokers who have a minimum required deposit of $50 or less.

 

How to Register with a Forex Broker

Even with just $50 available for investing, it is easy to start day trading Forex once you have found a broker that is right for you. Just follow these steps to start trading with a reputable Forex broker:

 

Step 1: Search for the right Forex broker

You should decide what exactly you are looking for when it comes to choosing a Forex broker. This will include deciding what trading and charting features you prefer. Also, how much leverage offered is another consideration. You will also need to find a broker that has a minimum required deposit of $50 or less to fit your available trading capital. 

 

Once you have determined the qualities you require of a Forex broker, you can start searching for the right broker. You can find numerous Forex brokers on the Internet with a simple web search. Choose the one you think best fits your requirements but take the time to check online reviews and testimonials. It is also recommended to select a regulated broker. These types of brokers will be regulated with a regulatory authority and this will give you peace of mind that they are offering a transparent trading environment that is being monitored.

 

Step 2: Register with the Broker

When you have identified which Forex broker you prefer, you will need to register for a new trading account with that broker. This will provide you with access to the trading platform which allows you to execute trades. 

 

Step 3: Practice with a demo account

The next step will be to try out the platform with the demo trading feature. This will allow you to learn how the software interface works and to develop a day trading strategy. You can experiment and make changes to your day trading strategy while trading with virtual money against actual market price action. Once you have perfected your trading strategy and feel comfortable with the trading features on the platform, you will be ready to move to the next step.

 

Step 4: Deposit funds

You will now be ready to deposit funds into your account. Even with just $50, you will be able to get started and can always gradually deposit more funds into your account as your knowledge and skill improve. Also, as you earn profits, you can reinvest these profits so that you can continue trading. 

 

Step 5: Start trading live

Once your account has been funded, you will be ready to start trading for real profits. Just implement the same day trading strategy you developed during your time using the demo account. You can always continue to make adjustments as needed based on the changing market conditions.

Conclusion – Start Trading Now

Anybody can start trading Forex, no matter how little capital you have to invest. Even with as little as $50, you can start day trading the Forex markets. The fact is, if you can be consistently profitable with just $50 trading Forex, you will be able to be consistently profitable with larger amounts of funds. Therefore, even if you think you do not have enough money to become wealthy from trading Forex, you can still develop the same skills and knowledge you need to become successful in trading currencies. You can always gradually deposit more as you are able to obtain funds to invest and as your trading skills grow. 

 

Of course, it is important to practice proper risk management. You should only invest as much as you are comfortable doing so and how much you can afford to lose. This is why even if you have a lot of money to invest, starting out with just $50 to develop a day trading strategy that is right for you is probably a smart thing to do. You should also be aware of how leverage works, so you can set position sizes that make sense for your situation. You should aim to find the right balance between risk and reward. 

 

You should also take the time to find the best forex broker for you. There are many options available in the market now, each with their own advantages and disadvantages. Take into consideration your available capital, your trading style, your appetite for risk and what features you wish to access when trading. Also, make sure the Forex broker is reputable and has a solid trading platform that is user-friendly and intuitive. The software interface should be designed so that even novices will be able to figure out how to navigate all of the trading and charting tools and features. Once you are ready to start, simply sign up, make your deposit and start taking advantage of the many trading opportunities available in the financial markets. 

Anton Kovacic
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