Over the last few years, I have engaged with many forex traders on the need to go after knowledge before thinking of making profit from forex. In one of the training I held last year, a question was raised around “How to trade forex with less then $1 equity” While I don’t advice anyone to start trading with less than $1, I want to show you that it is possible to trade forex with less then $1 equity.
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How to Trade Forex with less than $1 Equity
In this article, I am going to take you through a step by step guide on how I take a Forex account with $0.54 equity to $34 in 20 minutes.
Before trading Forex with less than $1 equity, you need to take note of the following:
- The Broker
- The Asset you are trading
- Your Lot Size
The first and most important thing to consider if you want to trade a forex account with a small equity is the broker. Most broker have a good leverage that can allow you to trade with as low $0.50. One of such broker is Deriv. I have used Deriv for more than 6 years, they are one of the most reliable and trusted Broker with over 20 years in the industry and they are beginners friendly.
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They are many other good broker out there, just do your research and go for the best, but if you don’t know where to start, I will recommend Deriv.
The Asset you are trading
If you are a Boom and Crash trader, It maybe impossible to trade Boom 500, Boom 300, Boom 1000 or Crash 500, Crash 300 and Crash 1000 with less than $1, but very possible to trade Vol 10, Vol 25 (1), etc., So your choice of asset is very important; look for the asset that is friendly enough for small account.
Your Lot Size
One of the challenges I have seen with many new and struggling traders is risk management. You can’t use big lot size for a small equity account. In a way, your lot size determines your risk appetite ratio in the market, so try as much as you can to manage your risk by starting with your lot size.
How I take a Forex account with $0.54 equity to $28 in 20 minutes
This was a challenge and I was willing to see it through; sometimes as a forex mentor, you need to show your mentee practical skills and experience that will stick with them for a long time. Before I attempted this challenge, I did a comprehensive analysis of the asset I wanted to use for the challenge and I came out with this conclusion.
- I decided to use Vol 25 (1s)
- I decided to start with 0.005 lot size and increase the lot size as the equity grow
- My strategy was using the principle of support and resistance for the trading
Since I had so many people watching; I was very careful not to make any mistake in-terms of risky entry, so, I confirm my entries using trendline, support and resistance and market structure.
I started with $0.54, closed the first trade at $10.67. From $10.67, the equity grew to $14.41
After few moves, I close one position, then add another to push up the balance to $12.60 while the equity soar to $27.10
Then I allow the the equity to grow to $34.41 while following up the trade slowly with Stop loss
One of the thing most traders are consistently looking for is strategy; So in this challenge, my strategy was as follows
- Use the least lot size for the chosen asset
- Add Exponential Moving average (EMA) 48 to the chart
- Mark up High-High and Lower-Low on M5
- Draw a trendline on M30
- Study the Market structure and note major support and resistance zones
- Place a buy when the price is above 48 EMA and sell when it’s below 48 EMA
- Target just $30 dollars daily.
To be a successful market trader, you need to have a good knowledge of the market, it doesn’t matter your equity, you can still make a sustainable income from the Forex market