How to trade Forex with $1000

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Posted by Felix Okoli on Wednesday January 30, 2013 at 8:1:57:

There are many ways to trade forexx with a $1000 capital but here is an easy way you can do so and I hope it is helpful.

Let's assume you have a $1000 capital to trade forex, how would you trade it?

Well, here is an easy way you can trade it without using too much market information or indicators. Just by relying on a daily bullish run, you can cut in some quick profits in a modest manner.

As you should know, forex trading happens 24 hrs in a day for about 5 days in a week. So we are going to be trading Mondays to Fridays on a particular currency pair and cut in some small pips daily for 25 days in a month.

SETUP
===========
Currency Pair: EUR/USD
Target Pips: 40 pips
Exit stop loss: 40 pips
Risk:Reward = 1:1
Maximum Daily Profit: $20
Maximum Daily Loss: $20
Entry Time: 7 am CAT
Position: Long
Daily quantity: 5000 units

Scenario
=============
So I wake up around 7am CAT and buy EU with about 5000 units at a price of say $1.3500 and then immediately set up an exit price of $1.3540 and a stop loss or $1.3460. I do this because the EU tends to appreciate daily and during the London session so I jsut wait for a small bullish run. If it hits $1.3540, I would have gained $20 and it it falls to $1.3460 or 40 pips below my entry point, I would have lost $20 too.

So, I'm just taking my chances but with the idea that I'm going to have more wins than losses.

At the end of about 25 days in month ans assuming I win daily, I would have gained about $500 and If I lose consecutively for 25 days which is unlikely, I would have lost $500.

This is just a simple strategy to gain some pips a day. More experienced forex traders tend to trade many positions a day and tend to trade the news, use higher risk/rewards and trade large volumes.

This is not a strategy for trading the news but just trading daily bulls for small pips given my personal trading experience on the EU. I guess you can also trade currency pairs like the GU like this.

Comments:

Re: How to trade Forex with $1000

could you kindly direct me to the best material for a forex newby to prosper?

Re: How to trade Forex with $1000

You can try babypips.com

Re: How to trade Forex with $1000

I bought an ebook recently and i am doing fine with it. It's self explanatory. I got it at a blog. judychristina.blogspot.com