Can we make money in forex trading or will we end up losing everything? In fact the answer to this question depends on your seriousness as a trader and investor.
If you are a trader who is looking to take maximum risks in order to multiply his trading account by 10 in a month (we caricature hardly), then you risk a cramming of account, however if you are looking for security and profitability Progressive, so yes, forex trading can prove to be a profitable business for you.
Starting from a limited initial capital and engaging in forex trading with the minimum deposit offered by forex brokers is the case of most traders. So starting and investing in Forex a small amount of money means that we want to achieve a high profitability, we understood. We know that without risks there is no return on investment, but it is not necessary to risk 10%, 20% or even 30% of its capital on a single trade, that would be to run financial suicide.
The best thing to do if one decides to engage in forex trading with 200 € is to make it grow in the long run. You can practice scalping or day trading by controlling your risk (for example, follow the 1% rule in forex trading) and earn money without risking a larger share of our trading account. If you double your capital, for example, from € 200 to € 400, you will continue to risk 1% of your capital, this time the risk will be no more than € 2 per trade, but Of 4 €, in the same logic, if we find ourselves with a capital that has grown to reach 2,000 € then we will risk 20 € per trade.
One can even decide to increase the size of its positions faster, in order to play the exponential effect even stronger. For example, each time our capital increases by 5%, then we increase the size of our initial position in euros by 5% (the risk will remain 1% of the total capital in any case), Example on 105 € we will pass our risk from 1 € to 1,05 €. This method of profit management is known as the compound interest method and is widely used in experienced traders.
One of the other factors that is worth the cost of being studied is the risk reward ratio, knowing how to manage the risk reward ratio as a pro is important and can greatly increase the profitability of a trader in the money markets.
Forex trading is not an easy business but it is an activity to consider as a true business. It is important to think like an entrepreneur when one is independent trader and approach trading with the most seriousness possible. A beginner in forex trading will thus logically have to follow forex trading courses or trader training before taking his first steps on the markets through a trading platform of a regulated forex broker, such as eToro.