What is Your Initial Investment?

Written by: Dave Green • Wednesday, July 18, 2012 • 2 min read

• Last updated: Wednesday, July 18, 2012

Every new trader who wants to invest in Forex trading ask himself “how much should i invest?”. There are traders who have the ability to risk high amounts, while others have the capability to invest less. We at FX Market Leaders have divided this subject into five levels. Each category represents a strategy. Try to decide which level you belong to.

$ 20 000 + Premium (VIP) account

This is the recommended amount for more advanced traders who have already accumulated extensive trading experience. Successful traders who want to grow their capital may deposit high numbers. Note that it is advisable to invest less than 15% of your total assets. These types of premium accounts usually offer lighter spreads, direct access to the broker's trading desk and other extras.

$ 1,000 +

This is the amount that we recommend for disciplined traders who take Forex trading seriously. The advantage of $1000 + accounts is that they allow you to start with a stable balance of great depth, meaning you need only commit a small % of your total balance in each of your positions. This will reduce the risk factor in your trades, enabling you to learn and progress as a trader more smoothly. You will also be able to see winning trades worth a few dozen to several hundred dollars for each position.

$ 500 +

Recommended for traders who cannot afford a higher deposit to kick off. A few hundred dollars will allow you to start your trading properly. The good news is that you will still be able to generate nice profits from your positions. However, your depth of capital will be low, so you will need a good trading strategy for money management. Many brokers, among them FXCM, eToro, and 4XP provide you with a personal account manager when opening a $500 account.

$ 200 +

Less recommended, but still an effective deposit. The amounts invested in your trades will be relatively small (maximum $ 10 per trade), but with appropriate leverage you will be able to turn your capital into profitable positions by the end of the month. Your profits should range from a few dollars to tens of dollars per single winning position. This capital can also be useful if you want to have a first taste of the Forex market and a nice introduction to the possibilities it has to offer.

$ 25/50 +

These are the minimum deposit amounts at most of the recommended brokers in our list. It is possible to open accounts this size and to see good results, but your potential profits will be low for markets like Forex and commodities. These amounts are popular for traders who are eager to experience the real thing and feel the excitement for the first time, however, because the amounts involved are so small they don’t provide a good representation of what serious trading is actually like.

• Decided on which amount you wish to invest? Visit FXML's Most Recommended Brokers page to choose who to open a trading account with.