Is initial capital important?

hi guys,

Can one build up a six figure amount just starting out with few hundred bucks?

Sorry I sound amateurish but having decide to trade live next year , need to know if small account is detrimental to one trading performance.

Any advice is appreciated.

Of course you can build up a fortune off a US$100 initial capital, however it'd take you a whole life via senssible trading (meaning not risking more than a 3% of your account per trade, strict money managment rules, etc).

In my opinion, US$10,000 is the magical figure upon which you can feasibly start trading regular lots (as opposed to mini lots) and thus start see'ing decent money flowing.

thanks WTB, my thoughts the same but I decide to go for it even it mini-lots.
Time is my enemy

If time is your enemy, perhaps you might want to re-consider trading altogether. Patience is a trader's most valuable virtue!

If you are only starting off with such a small float, then you would need to use a broker like Oanda who will let you trade whatever trade size you want. You might start with 5463 tradesizes (based on your money management and position sizing). When you made a profit the position size might go up to 5535 and so on. This way you can take much better advantage of compounding.

You should also save as much money as you can and continue to add to your trading float until the money that you are adding is too small compared to the money that you are making. Not much point adding $50/month if you are making $1000/month from the trading but certainly useful to add $50/month if you are making $20.

Simon

How much are you paper trading with? If you plan to start out with a few hundred bucks than you should paper trade with that amount. This is the only way you can learn to expect what is real. I myself paper traded for a while than started out with 3 hundred, because I don't like the idea of losing 3 hundred. I did lose all but 3 dollars, any how what ever amount you actually use will make you a better trader than actually paper trading for such a long period.

i recently opened my live account and i started w/$5k and i trade 25k units per trade....not too much pressure and it eases the learning curve as opposed to 100k lots (oy)

GoatT,

What stop sizes are you normally using? They wouldn't want to be much larger than 40-50 pips. You are losing $2.50/pip so at 40 pips you would lose $100 which is 2% of your capital.

Simon

You can if you use extremely high leverage, throw money management out the window, and get lucky for for 6 months straight.

Aside from that, it's still possible but it will take a very long time depending on your risk exposure per trade.

I used to keep my stops pretty tight (too tight) but I'm letting them run a bit more. I used to be 15-20....but I'm widening them!

My stop sizes are usually up to the term I trade. When I scalp, it used to be 20. Otherwise, it's larger.

The BEST way to begin forex is to start with a NO DEPOSIT bonus forex account . what is it ? just google it.it the safest way to test out your forex system.Its a live account that's funded by the forex broker.

Just my half cent: it is possible to start with whatever sum you want nowadays (in the order of hundreds..unless you wanna gain like 20-30 cent per day!), if your broker allows trading with microlots or even nanolots. But as other already said, making a six figure income from there is a looooong way if you use savvy money managment (1-2-3% of capital risk per trade). Also it depends by the trading system/s you use cause some performs (generically speaking) better then others...money managment is always THE priority,though.

If you are incline to gamble, of course you can try high leverage hoping in some luck for having one or more doublings of the account in short times (and then maybe start using correct money managment,or anyway a not suicidal one), but in this case be prepared to lose everything ,cause the more times you walk this way (and EVEN for just one single time!) the more the odds are against you.
GL