How to trade Forex with $200

Posted by Chidi on May 27, 2011 at 06:06:53:

Although trading forex with only $200 would not be the best thing as using $1000 would be much better but it doesn't mean that you can't still trade with $200. The only thing is that you may not mak as much profit as you could than with $1000 or be able to stay much longer in the trade but if you knew how to do it, you can grow your $200 to even $1000 within a few weeks if the odds favour you.
Here is a simple way to trade forex with just $200:

- Limit your losses to 5% i.e. $10
- Use trend trading and don't just exit a trade with small gain. Try to avoid trading when price chart is zigzag or unstable
- Use Marketiva's 100:1 margin to control investment worth $20,000 but risk only 5% of your $200 which is $10
- Use a stop loss of 20 pips and take profit of about 20 pips or more per entry
- Target 5 trades per day if you can although one good trade can earn your $10 if you close at 20 pips profit
- If you are lucky, you stand to gain 5*20*0.5 = $50

Here is an example:

Now suppose I have $200 in my account and my preferred currency pair is the EUR/USD which has a price of $1.4000. I then risk $10 by buying 5,000 units costing $7000

- Now for every pip(percentage in point) on the price e.g 1.4000 to 1.4001 = 0.0001, it will cost $0.5 = .0001*50000
- My exit stop loss point is set at 20 pips which is at 1.3980 and could cost $0.002*50000 = $10
- My take profit or exit target is set also at 20 pips or more which is also equal to $10
- I can't lose more than $10 per trade
- I will be able to gain more if I follow the trend and increase my pips to over 20 if I have been winning continuosly

Tip:
If you want to make sure that you gain more than you lose, then here are some tips:
- Follow the trend. Buy with a rising price and sell with a faling price.
- Always set an exit stop and take profit
- Exit before any major news. You can use www.forexpros.com/economic-calendar to monitor currency reports
- Don't trade if you don't understand the news
- Try to make a good entry always and stay on the winning side
- Don't stay in a position till the next day. Always try to close a trade within that same day.

Follow Ups:
Re: How to trade Forex with $200

Posted by Segun Okesanjo on June 16, 2011 at 00:36:33:
In Reply to: How to trade Forex with $200 posted by Chidi on May 27, 2011 at 06:06:53:

I am fully interested.