Should Forex Trading With Large Capital?
Capital in forex trading is one important factor. Even in trading we are introduced 3M: Mind, Method and Money, as an important pillar in forex trading. Well, should the forex trading with large capital? To know this we will compare the advantages with limited capital.
It should be pointed out here that when we speak of capital we will not be constantly talking about nominal figures of money we have, although it will later be related. If associated with capital strength, in forex trading, small capital is limited not necessarily will fail and large capital is also not necessarily successful. All depends on capital management.
But what we will discuss here is the “flexibility” to run the strategy. The amount of capital will also determine the strategy that can be applied in our trading activities.
Capital = Ammunition
If analogous to a military term, let’s say a trader is a soldier sent to the front line, but only equipped with an AK47 rifle and ten bullets. Of course the soldier must save the bullet and really choose a valuable target. The soldier can not freely fire a bullet without choosing a target, because every bullet will be very valuable.
Real Account ≠ Demo
We should be able to distinguish the “sensation” when we trade with a demo account and a real account. Using a real account means that our money is risky so any decision-making should be right. At least use proper analytical procedures.
If you start with a limited capital, even if you managed to get a profit, but we will feel no flexibility in applying the trading strategy compared with accounts that have a more loose capital. Profit earned was not maximal because not every opportunity can be utilized properly. Never even do a transaction for days. Not because there is no chance, but because the risk (stop loss) technically can not be anticipated with the capital management that has been arranged in the trading plan.