I am under capital, but trading is my passion. What to do? Any suggestion!
Almost all novice traders have the same confusion. They enter the forex market undercapitalized.
Not only beginners but professional traders also need capital to enhance their profit. When they fail to manage high capital accounts, they have to consult brokers and other platforms, as discussed in this post: How to get capital for forex trading?
There are several ways to get capital for forex trading. You can get funded accounts from brokers like MAM accounts. Traders can use their own capital, manage copy trading setup, and consult prop firms. They can also manage capital by educating forex and providing signal services. Moreover, your family and friends can also help you in this case.
High capital or funded accounts are helpful for professional traders with a long positive track record. For newbies, it isn’t easy to qualify for a $10,000 or more fund.
Minimum Amount Required to Start Trading
How much money do you need to be a full-time trader? The simple rule is not to risk more than 1% of your capital on every trade.
Based on this rule, if you start with low capital, you are always under pressure. However, you can even start with a $1 or minimum capital of $10, $100, $50, and more than $100.
The only way to make a high profit with low capital is to use high leverage. Here again, using the leverage factor recklessly can wipe off your account.
Don’t fall into the trap of high leverage, try to make consistent profit with low capital, and don’t risk more than 1% of your average capital.
10 Ways to Get Trading Capital for Forex Trading
The first thing is to learn the trade and then try to get funded accounts. Experience of 12 months or more is good to qualify.
Here are 10 Ways to get trading capital for forex. Let’s read the detail:
Use Your Own Capital
Running your own fund is the dream of every trader. However, it’s not as easy a task as it seemed to be.
To open your own fund, the minimum asset requirement is around $10 million. That’s huge indeed.
With the increasing trend of managing a trader’s own money fund, the rules are getting stricter.
It’s a long way to start your own fund as it requires several years of stable profit-making track record. You are also required to establish your authority in the money market.
- If you succeed to make a profit, your trading career is bright
- It is stable and helps to generate consistent profit
- Require long track record of 3to 5 years with an audit
- It will cost much to establish proper setup
- Need to hire office, staff and other trading software
Get Fund from Family & Friends
Maybe your family member is the first one to offer you a loan. You can talk to them after learning to trade thoroughly.
You can show them your plans and goals about profit. Seeing your passion, they can support you and help you to get the fund.
But remember the taking loan is not a good practice. Forex is a risky market, and it can further throw you into multiple loans.
The good way is to beg for investment and a 50/50 profit share partnership. This way, your friends and family members will happily invest.
- If it’s a loan, it can be interest-free from a family member
- Strong money commitment is needed
- It can destroy your relation if you lose
- Don’t go far without proper paperwork
Get Funded from Your Broker
Your broker is the only person who can make or break your trading journey. He is the first to offer you capital but under certain conditions.
To make a handsome earning, you should have a good relationship with your broker.
You can explain your needs for capital to a broker without hesitation. You can also ask your broker about possible opportunities and offers to increase your capital.
The most common source to get funded in forex trading is your broker.
- No additional charges
- Can set up as MAM account
- No need to connect to the investor directly
- Brokers can trade against you using tricks
Get Funded from Prop Firms
Prop firms claim that “You can trade with their own capital.” They are private firms that will let you trade with their own capital.
You can search for these prop firms in your locality. They indeed offer you capital to trade, but it’s also true that they will get a share in your profit.
It’s more like the capital share and profit share model. Profit is always 50/50 between the two partners.
One is a prop firm, and the other is the trader. These firms offer you a trading desk in their office.
Nowadays, a new type of online prop firm is emerging. They offer you capital, and you can trade with this capital without joining trading desks as a remote trader. You can trade from anywhere in the world.
- Good for experienced traders
- Good for traders who want to establish their own fund later
- Require minimum track record of 12 to 24 months
- The monthly fee of using the trading desk is up to 1000$ per month
Get Funded from MAM Accounts
MAM accounts are another source to get capital for trading. MAM refers to Multi Account Manager. Your broker is the one to offer a MAM account.
In this account, traders can manage multiple trading accounts using a single terminal. All the funds of traders are pooled into a single MAM account.
From where every trader can execute trades according to conditions of investor or broker. This account costs 20% performance fees and spreads, which traders pay.
- Trade Through automated copy trading software
- The platform doesn’t charge software fees
- A stable account with consistent income
- Requires a minimum track record of 12 months with a minimum $10,000 account.
- Performance of MAM account is dependent on your residing country.
Get Funded from Copy Trading
If you are a serious trader, you can set up your own online portfolio to offer a copy trading facility to others.
You need to buy automated software and build your own website. It will take time to attract customers or clients to copy your trading style.
Once you can attract clients, you can build your capital as clients will bring their investment to share with you.
Though the challenging thing is to reach the top ranking among the lead traders, this is competitive and risky.
If you can attract 50 clients with $ 100 copy trading fees, you can generate $5000 as your monthly income.
- Don’t require a long track record
- No big investment is needed
- It is time taking process
- It requires high-quality knowledge of technology
Get Funded By providing Signal Services
To collect capital, you can provide different services to brokers. You can sell signals and can earn a decent amount.
In turn, you can use this income as capital for trading forex. Typically, signal services cost $50 to $100. You can send these signals to clients via email, Telegrams, and massaging apps.
DARA is one such platform where you can set up this process automatically. To promote your signal service, you may not need the website.
You can even set up signal service through Facebook, YouTube, and Telegram. This is the simplest way to get funds without investment.
- Quick setup
- No need for a long track record
- A lot of the clients don’t follow signals
Make Money by Educating Forex
If you are a graduate in forex, you can generate money by educating beginners. It is a better idea to start an online paid course and generate decent income as capital of forex. Paid mentorship is another way to collect funds for trading in forex.
Your forex knowledge can bring income. So, don’t waste your time and start teaching forex. Market analysts make decent money by analyzing the market and teaching beginners.
Many beginners are nowadays enrolling in different mentorship programmers. You can start one such program and then invest the money you earn as capital in the forex.
- Qualified traders can do so
- Require experienced traders in teaching fields
- Not every forex teacher is a good trader
Get Income Through Cryptocurrency Exchange
With the increasing trend of cryptocurrency, now brokers are trying to connect crypto to the forex market. Many platforms are offering free mining.
You can collect BTC or other cryptocurrencies from free mining. After this, you can convert this cryptocurrency in USD to use as capital in forex trading.
- A quick way to generate income
- Free mining is easy
- Free mining platforms are slow
Get Funded by Algo Trading
Worried, no money in hand and want to trade? You can go on with Algo trading funds. This is an alternative investment fund that is designed for professionals and updated traders.
If your trading is done according to the algorithm, you can avail yourself of the chances of attracting capital.
Generally, the Algo trading platform charges a 20% performance fee and 2 % money management fee to cover this business cost.
- An inexpensive way to attract capital
- Great for learning
- Many traders fail to trade according to the algorithm
We have another related article about “forex trading without a broker,” you can check it out.
How Do I Get Funding for Forex Trading?
There are several ways to get funding for trading forex:
- Avail Individual Forex Fund Manager
- Get funded directly through brokers
- Get funded using PAMM and MAM accounts
- Get funds from Forex Remote Trading Programmes
How Do I Get a Funded Trading Account?
To gain access to a funded trading account, you must prove your ability to earn a profit. To do so, traders need a winning strategy and risk management skills.
All you need to do is to be consistent with your trading style and profit-making strategy.
What is Forex Funded?
You can understand the phenomenon of forex funded through a carry trade. In this trade, traders tend to borrow a currency in a country with a low-interest rate and use it as a funding currency to buy future and commodities.
It’s evident from the above post that getting funds for trading is possible but not easier. Many funded accounts require a long track record of 3 to 5 years on a $10,000 trading account.
If you are a serious trader and have a good track record, you can surely avail MAM accounts opportunity.
I would never recommend using your Mum’s last $500 as forex is risky. It’s a better idea to offer a 50% profit to your investing partner.
Don’t forget to do proper paperwork before starting a forex partnership.