The forex market is surrounded by several myths and misconceptions, especially when you consider the reported ease with which traders can make a profit.
After all, it’s actually thought that as many as 70% of all forex traders regularly report losses through their account, highlighting the reality of currency trading and just how difficult it can be to achieve a sustainable profit.
Another myth is that you’ll need huge amounts of capital to start trading forex for real. But exactly how accessible is the forex market, and how does it compare to other asset classes and pastimes?
How Much Do You Need to Start Trading Forex for Real?
Currency trading is an incredibly popular pastime across the globe, with the forex market witnessing daily activity volumes in excess of $6.6 trillion.
Despite this, however, you can actually get started as a forex trader with a minimum deposit of £10. You can certainly kick start your currency trading career for less than £100, while it’s also possible to leverage lucrative welcome offers when registering with platforms like the MT4 online.
The relative accessibility of the forex market has much to do with its structure, as it remains one of the most highly leveraged entities in the financial realm.
Leverage is defined as the process of borrowing capital to open and control disproportionately large positions through a small deposit, with this typically expressed as a ratio. Even licensed and reputable brokers can offer leverage of up to 100:1, so a relatively small deposit can go a long way when trading currencies.
So, despite being a complex and volatile marketplace, forex is actually one of the most accessible from the perspective of cost and finance. In fact, you can trade freely for less than the cost of a cup of coffee each day, while using disposable income or the cash from your Christmas bonus!
Forex vs. Stocks and Gambling – A Comparison
Of course, some will argue that stocks are equally accessible, as you can theoretically open a trading account for the same amount of £10.
While this is technically true, however, you’ll probably need at least £200 to start investing in stocks properly, although this will only enable you to target small-cap assets that hold relatively low real-time value.
To trade stocks more freely, you’ll probably need around £1,000 in your account, while successfully investing in blue-chip, dividend stocks will require a far larger and more prohibitive buy-in.
People often compare speculative vehicles like forex trading with gambling, although it’s interesting to note that Brits currently spend more on the latter than they’d need to start investing in currencies.
In fact, Brits spend an average of £2.60 per week through gambling verticals, totalling £135.20 overall. This is more than you need to commit to forex trading, while you’ll have a far greater opportunity to strategise and minimise losses when investing in currencies!