Trade with little money
When you wish to begin trading or investing it is of course not always the case that you have plenty financial resources. For the new, beginning trader with little experience it is therefore very attractive to begin trading with little money. How exactly does this work?
Get started with a small capital?
It is very well possible to get started with trading with a very small starting capital. Anyone can do this by opening a free account with a broker:
- You will immediately receive a free bonus with which you can try trading.
- You can trade stocks, commodities, indices, and Forex!
- You can never lose more than your deposit!
Trading with little money obviously requires a different preparation than if you were going to trade with a lot of money. When we talk about little money on this website, we mean approximately one hundred Euros or a couple of hundred Euros, and not the thousands or tens of thousands of Euros that are sometimes used for investing or trading.
Before you start trading with little money it is important to set clear goals for yourself. The stock market tends to fluctuate, so it is especially important to set long-term goals for yourself. If you have a clear objective (e.g. trade to make some extra money for your retirement) you will be more able to focus yourself to achieve that objective.
If you want to trade with a small amount of money CFDs are ideal trading products, with which you, as a trader, can make large profits. If you trade CFDs your deposit will be multiplied by a certain factor through a leverage. The benefit of this leverage is that you can open larger positions with the same amount of money. In a nutshell: the greater the leverage, the higher the potential return.
Small capital, high yield
Even if you have just a small capital to trade CFDs, the yields on this trading instrument are often much higher compared to non-leveraged products. Briefly stated, this means that the yield increases as much as the height of the leverage. To give an example: if you would use a leverage of 1:10, your profits will be ten times as large. If you would use a leverage of 1:30, your profits will be thirty times as large. This makes that traders with a small budget can make decent profits!
Most CFDs brokers have a minimum deposit of one hundred Euros. This means that you only need one hundred Euros to begin trading. Suppose we use a leverage of 1:50, then we can trade with a total capital of 5,000 Euros, although we only had 100 Euros. Besides, it is also possible to distribute your money among multiple positions.
If you do so, you will spread your opportunities and your risks, and your chances of obtaining high returns will increase significantly. As a novice trader it is after all very well possible to trade with small amounts of money, to gain experience, but also to actually make profits!