Better to trader forex or futures with small account?
I am trying to decide if I should focus in on forex or mini futures with a small account size of $2000. I was thinking mini forex as i have studied it intensely for quite some time but would like some feed back as to if maybe sugar 11, grains, or another mini future may be better. Thanks
The following user says Thank You to trader343 for this post:
I have been where you are, and I am a firm believer in starting in the forex markets. I started with a micro account with $90, and it was the best $90 I ever spent lol. After previously making good money, and then blowing up some option accounts, I started very conservatively.
Micro is 10 cents a pip, so with no emotion in the trade I was able to focus on market functionality and profitability. Then once I was profitable with my $90, I threw in another $500 and bumped up my leverage. It takes time to become comfortable with larger and larger $ on the line, so this helped me become comfortable gradually, and to prevent me from adding money to an account that wasn't profitable. Because even if you took a hit and lost half, you could now reduce your leverage to half, and trade back up to that amount without blowing up the account. As compared to futures where your leverage will stay the same till your account hits zero, well until you get a margin call anyway.
Another big plus is being able to trade and scale out in multiple contracts in forex, that you could not do in futures with that account size. I trade a small futures account with one contract, but my goal is to play things quite conservatively until I get my account to where I can trade at least two contracts. But I never would have even have opened the account at $2k, I believe you might as well throw that money out the window. You will gain a little market experience, but it will be very quick and very expensive.
I ended up making the most money trading the forex monthly and weekly charts where you can really catch the large price swings. If the day trading seems tough at first, I would switch to the longer term charts. If you cannot be profitable in longer term trades, it will be near impossible making it day trading. Where so many other factors come into play that are even harder to control.
I used FXCM and had a great experience with them.
The following 12 users say Thank You to lovetotrade for this post:
Start at a FX broker that allows to trade with small sizes, i.e. Oanda (smallest trade size 1 unit) or similar ones. Don't go to a broker that is located in Cyprus or similar countries having no regulations.