This is one question that I often received from fellow traders who are following my blog. In today faq, I will be sharing with you my point of view on this issue.
Below is the question
I started trading with $20 on the 25th bebruary 2011, but lost all most all my money. I am only left with $ 3.44 as of 9th march. what do I do?
I understand that there are a lot of people who are trying to make some money from forex trading. However I really discourage you guys from setting up an account with $20 as you will not be able to trade properly. You just need 2 to 3 losses and you are out of the game. If you are trading the micro lots where 1 pips = $0.10, you need to put in a minimum of $250 to be able to trade properly. If you are trading the mini account, I will suggest you to start with at least $1,000 and if you are planning to go for the standard account, you need a minimum of $10,000.
For those of you who do not have that much money to start with, I will suggest you to go with demo account which is free and can give you all the time to try out your strategy and find out what works for you. Once you have a good trading strategy, you can start with a micro account first and slowly accumulate your capital.
As for the question above, I will suggest you to go into demo account first as it seems to me that you are trying out your luck and do not have a good strategy on hand. With the demo, you should be able to figure out a good and reliable trading strategy to work with. Once you are able to profit consecutive for 3 months on your demo account, you can then start a micro account with $250 and then work on it.
I have known of a trader who started with $10,000 and has accumulated to $260,000 within 2 years. The key is patience and a good trading strategy. I understand that you must be thinking of ways to make back the money that you have lost but I must tell you frankly that it is impossible to make your $20 back with just $3.44 on hand. You need to make at least 600% to get back to $20.
Therefore my suggestion for you is to work on having a reliable trading strategy and then start an account with a minimum of $250 to make your money back. It will take a minimum of 6 months to get from no strategy to a reliable strategy and you have to bear with it.