Are you interested in trading forex but not sure how much money you need to get started? In this blog post, we’ll break down the amount of money you need to start forex trading in Kenya and give you some tips on how to get started. Keep reading for more information!
When you’re ready to start trading forex, you’ll need to have a few things in place first: a solid foundation of technical analysis, a plan for risk management, and enough starting capital to support your trading strategy.
How much do I need to start forex in Kenya?
The amount you need to start forex trading in Kenya will vary depending on the broker you choose and the platform you use. However, most brokers require a minimum deposit of around $5 in order to get started. Some of the brokers with a minimum deposit as low as $5 include HotForex, FxPesa, and XM Forex.
But truth be told, it will be extremely hard to realize any considerable profits with such a tiny amount.
The ideal amount of capital that one needs to start forex trading is at least $2,000, but no less than $200.
If you’re an absolute beginner, I’d recommend that you have at least $250 as your starting capital. The higher the amount you invest, the better the chances of success.
If you’re new to forex trading, only invest as much money as you’re comfortable losing. There is no cap on how much someone can earn with online forex trading. However, there is also no limit on how much a trader can lose. Newcomers to the forex market should keep this in mind before investing too much money into the trade.
Why You Shouldn’t Trade Forex With a Small Account
Does it matter whether you start trading forex with a $100 account or $1,000? Yes, it does matter. Let me explain.
I am sure you’ve heard how about 80-95% of new traders lose all their invested capital within the first few days/weeks of trading. The main reason for this sad statistics is undercapitalization. Unfortunately, even the best forex brokers in Kenya won’t point out this to you. They will encourage and entice you with minimum deposits as low as $5.00 knowing very well that you can’t make any head start with such a small amount.
The dangers of trading Forex with a small capital are twofold.
- First, you may not have enough money to sustain drawdowns in the market.
- Second, you may not have enough money to take advantage of profitable trading opportunities when they arise.
Trading forex with a small capital can also be risky because it can lead to over-trading. Over-trading occurs when traders place too many trades in an attempt to recover the losses from previous trades. This often leads to more losses and can quickly deplete the trader’s account equity.
How Does the Amount of Capital Affect Forex Trading?
The amount of capital you have at your disposal when trading forex can certainly affect how successful you are. For one, having more capital gives you a larger margin to work with, which means you can take on larger trades and make more money on successful trades. A smaller balance means fewer trades and a smaller position size and consequently less money.
However, it’s important to remember that forex trading is a risky business and it’s possible to lose money even when using a high amount of capital. So be sure to only trade with funds that you can afford to lose and never invest more than you’re comfortable losing.
Capital also affects forex trading psychologically. When starting out with a small account, it’s easy to feel like every trade is a matter of life or death. With more capital, traders can take on more risk without worrying as much about individual trades. This can lead to increased profitability in the long run.
However, too much money in a forex account can be a bad thing. The more the better when it comes to trading capital. But if your account balance is too high you might become overconfident and take on excessive risk with each trade. This could lead to heavy losses.
In general, traders should strive for an amount of capital that will make them feel comfortable, but not overly confident. The following is a look at what the ideal capital might be for most traders.