Is it possible to start trading FOREX with $1000?

[smuhr 10]

Go back to school on babypips.com

[charles1 10]

Opening an account is wise just so you can take advantage of all the educational stuff forex sites have to offer. Some of them even have weekly webinars. I know when I started out with the $50k paper accounts I lost a lot more quickly then I made. After reading how paper trading can affect live trading behavior I asked my account rep for my paper account to start me wtih $5k instead of the normal $50k, and instead of thinking in terms of money when i won or lost. I thought of it as points in a game and just forgot about the dollar sign. And I always played with the houses money, and reduced my position when i was losing and winning. I never went in on 1 lot and added on. I more like went in 2 or 3 lots and reduced. In the beginning i was more amped to make a million a day, now I'm more amped not to lose a million in one day, if you know what I mean. Take it slow and watch it build over time. I studied charts and one currency for a solid year before I went live.

[charles1 10]

Of course you can trade with a $1k just the same you can trade with $250 or $100,000. The only way to know what amount is right for you is to know that you've done your homework and you can trust the markets behavior as of late to make money management decisions that suit you stomach. I've personally started an account with just over $2k and in one week have just over $6k, now were the next weeks like that no of course not, could they have been of course they could. BUT I did my homework. Before I got into the market I ready a few books one i like the most The Markets Wizards. At the end of every interview there is some advice given to future traders; which i've made a note of. personally I'm a scalper I have no strength to affect the market but just to bottom feed. I'm like one of those little fish you see swimming underneath a shark. I'll go 1 lot maybe 2 lots in and as soon as I make them back I pull out and play with the houses money. Whether I make pips or lose pips I reduce my positions, because I'm not out to get rich over night. My goals is to work for myself and be responsible for my retirement. If I should get rich in the process so be it. Trading allows me a sense of freedom no job can give me. Today I scalp and someday I may be able to hold a position longer, but why ruin a good thing if it works. Hope that helped.

[jonbig04 10]

Wow, someone said you need 20k to trade. To each their own, but 20k? What the heck do you do with the money that you aren't trading with? I've never understood why people think you need so much money to trade. You need money to live while you LEARN how to trade, but IMO if you have learned you don't need much at all to get started building your account up. Once again this is only after you've put the learning and screentime and have developed a trading plan.

 

People told me to start with 5k per ES contract, but I couldnt figure out why I would do that when the margin is $500. What do I do with the other $4,500? I know my accuracy and risk and if I could lose $500 or $1000 per contract, I should'nt be trading in the first place, let alone $4,500.

 

Just my two cents.

[Aaron137 10]

I have heard the same thing - you need x amount to start trading. When starting out the maximum amount I wanted to lose was $100 and was risking about 10% each trade with a reward of about 2:1. Went on to triple my bank in 2 weeks and lost it. I think that was the most upsetting loss I had because I had not the discipline to follow the game plan. What no book can really teach you is discipline. The loss damaged my ego more than anything - having a plan and not sticking to it is what did the damage. Having a plan and discipline is the hardest part of the game - sometimes I think it would be easier to have someone looking over my shoulder and checking on whether I'm following the game plan.

 

I think what demo trading can really do though, is help you identify your win / loss ratio, reward / risk, help with money management, know what edge you have, and more importantly tracking whether you are following your trading plan.

[Aaron137 10]

Hi charles1,

 

What are you favorite chapters of The new market wizards?

 

Some of the books I've read or re-read lately:

1. Alexander Elder - Trading for a living, and Come into my trading room.

2. Trade your way to financial freedom.

3. Reminiscience of a stock operator.

[charles1 10]

Hi Aron,

 

I have no particular favorite chapter, but I do like Marcus' story a lot (I think its the first interview). Are Dr. Elder's books good reads. Now that I think of it two more interviews stick out. There's one trader who was a meat packing plant manager turned trader with like $25k, I think he said he took out $5k to live and traded with the $20k, and his wife was pregnant at the time. I just forgot the other one. Besides though Im at the point where I'm trying to branch out of my one currency I trade and learn other marktes, especially ones I can hedge against.

[Aaron137 10]

Dr. Elder mentions the triple screen method - look at the longer timeframes to work out direction and use shorter timeframes for entries and exits in the direction of the trend based on price action. It basically confirms that once you've figured out the direction of the trend, use prices for entry - trailing sell or buy-stops on shorter timeframes.

 

I believe it confirms what every successful trader ultimately uses - prices. Up until early december I was using indicators to try and figure out what was going on. Then I realised that the only indicator that really mattered was price.

 

The currency I trade at the moment is GBPUSD. Keeping an eye on gold. Haven't been successful with oil so I leave it alone - good to look at, not to trade (for me anyway).

 

With regard to hedging, and to reduce risk, I try to look for markets which are not correlated.

[thalestrader 14]

People told me to start with 5k per ES contract, but I couldnt figure out why I would do that when the margin is $500. What do I do with the other $4,500? I know my accuracy and risk and if I could lose $500 or $1000 per contract, I should'nt be trading in the first place, let alone $4,500.

 

Most people need the extra $4500 to cover their losses!

 

I have a friend who starts each month with 8K and trades the TF. Based on some things I have read in various forums, he should have at least 80K in his account to trade the size he puts on.

 

Best Wishes,

 

Thales

[drmcdanielsdc 10]

I have no affiliation with this group, other that I use them for the occasional spot forex trade. FXDD has a great website with news and commentary, you can see how he breaks down the markets, fibs, and uses technical analysis to help make trading decisions, it's updated about three times a day and i use the RSS feed into my trading station for updates.

 

McD

[MightyMouse 12]

Wow, someone said you need 20k to trade. To each their own, but 20k? What the heck do you do with the money that you aren't trading with? I've never understood why people think you need so much money to trade. You need money to live while you LEARN how to trade, but IMO if you have learned you don't need much at all to get started building your account up. Once again this is only after you've put the learning and screentime and have developed a trading plan.

 

People told me to start with 5k per ES contract, but I couldnt figure out why I would do that when the margin is $500. What do I do with the other $4,500? I know my accuracy and risk and if I could lose $500 or $1000 per contract, I should'nt be trading in the first place, let alone $4,500.

 

Just my two cents.

 

It sounds like you're plan doesn't include losing.

 

Good luck with that!

 

The fact is that you really do not know your risk or your accuracy, so err to the side of prudence.

[jonbig04 10]

It sounds like you're plan doesn't include losing.

 

Good luck with that!

 

The fact is that you really do not know your risk or your accuracy, so err to the side of prudence.

 

Let me repeat: if I am losing $1,000 PER CONTRACT I probably shouldn't be trading in the first place. In ES thats 20 points. If I know that the biggest drawdown I've ever had is 8 points ( $400 per ES car) than say a $2,000 account should be plenty for 1 car as it allows for a 30 ES point draw down before I can no longer trade. I would say thats plenty of cushion.

 

I think a lot of you would go nuts if you knew what I started with when I first went live with 1 car. I didn't see the point of idle money just sitting there for no reason. I left myself a cushion and if for some crazy reason that cushion wasn't enough than something was wrong with my trading and I should stop anyway.

 

Oh and the percentage gained on the acct (bc it was so small) was nuts! :rofl:

[MightyMouse 12]

Let me repeat: if I am losing $1,000 PER CONTRACT I probably shouldn't be trading in the first place. In ES thats 20 points. If I know that the biggest drawdown I've ever had is 8 points ( $400 per ES car) than say a $2,000 account should be plenty for 1 car as it allows for a 30 ES point draw down before I can no longer trade. I would say thats plenty of cushion.

 

I think a lot of you would go nuts if you knew what I started with when I first went live with 1 car. I didn't see the point of idle money just sitting there for no reason. I left myself a cushion and if for some crazy reason that cushion wasn't enough than something was wrong with my trading and I should stop anyway.

 

Oh and the percentage gained on the acct (bc it was so small) was nuts! :rofl:

 

The higher your leverage, the higher your risk of going broke which you have to worry about because going broke will take you out of the game, but it sounds like you have it all figured out.

[jonbig04 10]

it sounds like you have it all figured out.

 

 

 

Far from it, but IMO a large account isn't necessary. What's more important is the work done in SIM, how seriously you take it, and how prepared you are before putting money at risk.

[thalestrader 14]

It sounds like you're plan doesn't include losing.

 

Not for nothing, MM, but from your posts someone might surmise that your plan does not include winning. You need to smile once in a while.

 

Best Wishes,

 

Thales

[natedredd10 10]

Hi Aron,

There's one trader who was a meat packing plant manager turned trader with like $25k, I think he said he took out $5k to live and traded with the $20k, and his wife was pregnant at the time. I just forgot the other one. Besides though Im at the point where I'm trying to branch out of my one currency I trade and learn other marktes, especially ones I can hedge against.

 

The odds are though this trader simply got extremely lucky, not to mention it strikes me as extremely irresponsible and degen gambler to do this with a pregnant wife...

Starting any kind of trading with min margin is simply poor bankroll management in general...Its quite helpfull to investigate how other gamblers outside trading manage bankrolls. Money doesn't just sit idal in an account if you don't have all your leverage juiced, its there to cushion variance during random streaks of drawdown in a winning system.

Part of the problem with traders and small accounts is alot are putting on 2X Kelly/far past optimal F per trade without even knowing it, especially in FX..which even a winning system will get destroyed under with a high degree of probability.

That is not even including the lack of being able to use any sort of trade management when only trading one unit.

If you only trade one unit you have to balance the chance you take that one unit up to 3 vs getting 2 jobs, busting your ass for a year and saving so you can start with 3.

You don't read too much on forums about the later because too many traders get in the business because they don't want to work and are lazy IMO.

[MightyMouse 12]

Not for nothing, MM, but from your posts someone might surmise that your plan does not include winning. You need to smile once in a while.

 

Best Wishes,

 

Thales

 

I am incredibly flattered that you follow my posts Thales. Thank you. Your flattery plus about 2 dollars, should be able to buy me a medium cup of coffee.

 

If you would like to post trades real time with me head to head, I will be more than happy to do so with you. You can also go back and read my posts making that request in the past too.

 

I know, I know, I know you have nothing to prove to me or anyone and won't waste your time. But, you see, if you have nothing to prove, you shouldn't make comments about others the way you do. Oh, "Not for nothing."

[MightyMouse 12]

The odds are though this trader simply got extremely lucky, not to mention it strikes me as extremely irresponsible and degen gambler to do this with a pregnant wife...

Starting any kind of trading with min margin is simply poor bankroll management in general...Its quite helpfull to investigate how other gamblers outside trading manage bankrolls. Money doesn't just sit idal in an account if you don't have all your leverage juiced, its there to cushion variance during random streaks of drawdown in a winning system.

Part of the problem with traders and small accounts is alot are putting on 2X Kelly/far past optimal F per trade without even knowing it, especially in FX..which even a winning system will get destroyed under with a high degree of probability.

That is not even including the lack of being able to use any sort of trade management when only trading one unit.

If you only trade one unit you have to balance the chance you take that one unit up to 3 vs getting 2 jobs, busting your ass for a year and saving so you can start with 3.

You don't read too much on forums about the later because too many traders get in the business because they don't want to work and are lazy IMO.

 

If I am not mistaken that trader is Tom Baldwin. He was mainly a scalper in the TBOND pit. They have or had a distinct advantage over screen traders. It's very difficult to stay lucky over a very long period of time, so I kind of discounted luck when I read about him. But it could be that he was on a lucky streak.

[thalestrader 14]

I am incredibly flattered that you follow my posts Thales. Thank you. Your flattery plus about 2 dollars, should be able to buy me a medium cup of coffee.

 

If you would like to post trades real time with me head to head, I will be more than happy to do so with you. You can also go back and read my posts making that request in the past too.

 

I know, I know, I know you have nothing to prove to me or anyone and won't waste your time. But, you see, if you have nothing to prove, you shouldn't make comments about others the way you do. Oh, "Not for nothing."

 

69 cents will get you any size you want at McDonald's, MM.

 

I usually post at least a trade or two every day, and I try to very clear as to whether I am taking the trade or just posting a chart. I know that you know where you can find me. You have posted a comment or two there yourself, but you are welcome to post your trades there as well. Quite a few of us do, you know.

 

As for the rest, I was simply responding to a comment you made about Jon. That is how a forum works, isn't it? Or are you supposed to be allowed free swings while we stand around and clap?

 

Best Wishes,

 

Thales

 

You know where to find me, MM.

 

Best Wishes,

 

Thales

[MightyMouse 12]

69 cents will get you any size you want at McDonald's, MM.

 

I usually post at least a trade or two every day, and I try to very clear as to whether I am taking the trade or just posting a chart. I know that you know where you can find me. You have posted a comment or two there yourself, but you are welcome to post your trades there as well. Quite a few of us do, you know.

 

As for the rest, I was simply responding to a comment you made about Jon. That is how a forum works, isn't it? Or are you supposed to be allowed free swings while we stand around and clap?

 

Best Wishes,

 

Thales

 

You know where to find me, MM.

 

Best Wishes,

 

Thales

 

Thanks for the coffee advice.

[TAjammy 10]

try this, split up the 1000 into four different accounts of $250.

 

with each account spend 3 months, if one account goes bust in under 3 months, wait for the 3 months to end and trade another $250 account. do this for a year.

 

I highly reccomend joining a forex trading room, i remember joining one and has seriously helped, i don't day trade but swing trade but i can day trade thanks to these people. i left the room though.

 

Get in contact with professionals, if i hadn't done that i would be very very confused

[sicktrader 10]

I haven't read through all the posts in this thread, but in my opinion you should know what is the lowest starting amount based on your system. For me, I hit between 50% and 60% and I know this because of my trading data, not backtested data. As with any system, the risk of ruin is highest at the starting gate, so I would give yourself enough room to place at least five trades (unless you have a much higher win rate), with the 5th starting at a balance of around $510 if your margin is $500. I know that at some point I will run off a few losers in a row, so this takes into account the chance that it may happen at the start. While my balance is much greater than the $1,000, this is not different than the way I trade everyday. Each time I up the number of contracts I trade, I make sure that always eat 5 losses in a row before I am required downsize due to margin. So to answer the question, if your average loss is around $100-$150 per contract, then yes, you can easily start with around $1,000. At the same time, if you do not use sound money management, you will eventually get crushed. I move cash from my trading account to my bank account each time I double, and I maintain a cash reserve in order to post up more cash for those times when I experience a number of losses in a row which happens a few times a year.