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How much money should you start up an account with?

By Sean Hyman | May 18, 2009

I’m often asked the question in our courses….”How much money should I start my account with?” Good question. 

Let me give my personal opinion on this.A micro account CAN be started with $25 and a standard mini account CAN be started with $2,000. However, the less you start with, the bigger percentage of your account that you have at risk generally. 

So one way you can increase you chances of success is to have a well funded account. Let’s say that you have a 100 pip stop on one lot. That would be a $100 loss in the mini account and a $10 loss in the micro account. Let’s focus on the micro account, since that’s the best place for most beginning traders to start out anyway. 

If I have a $25 micro account and lose $10…then I’ve lost 40% of the account balance. However, if that balance were $100, then I’ve lost 10% of my account balance. I’m much more able to recover from a 10% loss than a 40% loss. Emotionally speaking too…it’s easier to handle the loss of 10% than it is for 40%. Now, if I had an account balance of $200, then my loss would be 5%. 

This is why I suggest people start micro accounts with at least $500 to $1,000 and start off trading only 1 micro lot at a time. In the end, you’ll be glad you started this way vs. starting with the minimum. Again, this is strictly my opinion as a trader and as an instructor. 

Ultimately, it will be your decision as to what you feel is the most prudent thing to do for you. However, a lot of people don’t think about the impact of their “beginning balance” upon their trading and the likelihood of their success and that’s why I bring it up here. Happy trading!

Sean Hyman

P.S. – Get your live micro account started, here: https://secure2.fxcorporate.com/fxtr/?plugin=0&locale=en_US_FX_EDU_LLC_MICRO 

Topics: What To Look At In The Market | 2 Comments »

2 Responses to “How much money should you start up an account with?”

1. Steave Says:
   October 21st, 2009 at 7:36 am

   Cool post as for me. I’d like to read a bit more about that topic.

2. Des Says:
   March 2nd, 2010 at 10:26 pm

   Thanks Sean,

   That was pretty was exactly what I was looking for, a nice starting figure that isn’t thumb sucked. Great site…

   Des

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