Traders know that they can open their account with a small amount of money. The amount is not fixed and it varies from broker to broker. It is commonly of 10 dollars and the highest you can go. Most of the traders deposit only 10 dollars to see how the trades are going. As they get a demo account, they take risky trades in the demo and sometimes get a successful result. This makes them hopeful about the live trading and they start taking big risks in a live account. The trends do not as planned and when they lose money, they think it is their deposit that is to be blamed. They have practiced trading with an endless deposit but in live trading, the amount is only 10 dollars. They cannot cope with the change and they place bad trades. This article will try to explain if deposit affects the performance of traders. You should keep in mind that your practice is your strategy but the deposit can also play a part in determining your success. Read this article and you will find out if deposit contributes in your trades.
You should never start trading without understanding the importance of mental stability. Some professional Aussie traders often believe 90% of the success lies within your mindset. You need to develop a strong personality in order to stick to your rules. Let’s say you have started Forex trading with a million dollar in your trading account. Does this mean you will be placing random trades without doing any sort of market analysis? The simple answer is NO. In fact, it won’t take much time to blow millions of dollars in the Forex market. A few big mistakes can easily blow up the trading account regardless of its size. The professional traders never think about the amount of money they have an investment in this industry. They always consider risk tolerance level in terms of percentage.
Role of money management
Always remember, money management is one of the key ingredients to making a consistent profit in the CFD trading profession. You can’t risk more than 1% of your account at the initial stage. No matter how good you are at trading, you can’t avoid the losing trades. So it’s highly imperative you always remain prepared to embrace managed losses.
They do not affect your performance
The answer is they do not affect your performance. We have told you that only skill matters in Forex. The industry does not know if you have deposited only 10 dollars or you have deposited a big amount of money. When the trades are placed, they are executed based on the trends and volatility. A hard-working trader fine the relation through their practice and skill and they place favorable trades. They do not mind the amount of their investment and all they focus on is how they can make the profit.
If you do not believe us, there are many ways you can place big trades like your demo account. The brokers give you the choice of using the leverage and position sizing, that will increase the size of your profit but also increasing your risks promptly. There are plenty of examples of successful traders who have emerged big from their mini account. They started with a small deposit and through successful leverage trading, they have turned their small investment into big. If you want to take the same trade like your demo account, you have got the chance by using leverage and positional trading. Do not blame the deposit for your losses, it you who have taken the trades and set the strategy.
Performance is the result of your skill and practice
You do not become a wonderful trader without practicing. You need to train yourself and only then you can get your desired result. The investment does not affect your performance. Your skill and the practice will give you profit, not your investment.