Are you thinking about getting into forex, but you’re a student? You might have a lot of people telling you that getting interested in forex is ridiculous. After all, students can’t really do too terribly much. It’s not like you can get a standard lot of 100,000 units. However, you can get smaller account sizes than that.
Units refer to the base currency being traded. So GBP/USD would be worth 100,000 GBP, where GBP is the base currency. The base currency is always referenced first.
There are mini lots of 10,000 units, along with micro lots of 1,000 units. Mini and micro lots are offered to traders who open mini accounts (which average from $2000 to $1000). Standard lot sizes can be traded with larger accounts only. The small lots aren’t going to bring you massive profits, but it will be enough to cover the losses that you face. You really need to make sure that you’re looking at the type of account that’s going to work with your budget. A mini account usually has a minimum of $500.
Before you can even think about trading live, you need to make sure that you’ve been using a demo account. You have to protect yourself from heavy losses, and that means that you’re going to have some problems in terms of getting things done. You just need to make sure that you’re focused on getting things taken care of in a certain way. Rushing through the papertrading phase of your life as a forex investor just isn’t smart.
But let’s get back to lots and risk, so you can get a full picture of what’s going on.
A trader stands to lose $0.10 per pip on a micro lot. That’s not too terrible much money, which is a good thing. You can’t avoid all risks completely in forex trading — oh, don’t we wish — but you certainly can lower risks greatly.
The key to being a forex student is to make sure that you’re not rushing into trades. Read extensively. The big forex investors read a lot of material before they think that they can just invest in the market. You really want to make sure that you get things done. You want to always make sure that you are working as diligently as you can in order to get the most return on your money. There’s no greater investment than educating yourself on how markets really work. You don’t want to rush in, and you certainly don’t want to just make guesses. A lot of forex blogs are going to tell you that it’s okay to go with your gut, but that’s not a good thing at all.
Take it slowly, and you’ll find that you really can become a forex trader…even as a student!