Advantages of having excess money for Forex traders
To be able to start trading in the forex trading business , every trader of course needs money as capital. Some people, especially those who are new to the world of trading may still be confused about how much capital should be used to start it. Actually regarding the amount of capital needed in forex trading you must calculate it first to then enter it into trading planning. The point is you need risk management in this case. But for beginners they might not be able to think until this stage.
The easiest thing to determine the amount of capital, you must consider how many times you will trade. If you will only trade in a small amount then you don’t need to prepare large capital. Conversely if you want to transact in large quantities, of course you need a lot of money and capital too. But keep in mind that if you have more money there are several advantages that you can enjoy in trading such as:
Can get VIP status
Most forex brokers have and provide VIP accounts that are intended for traders who have a deposit in large amounts. To become a VIP status this is actually highly recommended for those of you who do have more money. With VIP status, there are many benefits you can get such as low spreads or commissions, get a special account manager that can be contacted directly, get breaking news notifications from reputable news agencies, there is the possibility of getting free deposit, withdrawal and so on. For more details about the features available for VIPs, you can ask the customer service broker directly. If it is clear you can decide to upgrade your VIP status if you really want to. In addition, make sure that the broker of your choice is credible, regulated and reliable
More flexible in managing finances
With more money in trading, of course, it will make you more comfortable in managing finances. The more money you have can make you more free to open each position simultaneously. Furthermore you can be more free in using some strategies in your trading . But what you need to remember is that you must still have strong money management. Besides that with more money you will be safer from margin calls, if there is a sudden upheaval in the market. This means that with more money and money management that is in need, the risk of loss will be lower.
Long-term career prospects
in the world of trading there are two groups. The first group is beginners who do not know trading at all but are affected by broker promotions to deposit large amounts of money. The second group is a professional trader who has the ability and understanding of forex trading. Besides this second group indeed intends to develop his career as a trader
Beginners who are in the first group, most of them will only suffer losses due to lack of ability. On the contrary, the second group who are professionals will be able to succeed. Great capital for those who are experts will further hone their trading psychology. This second group treats trading like a business that is managed with full consideration and calculation.
Opportunities to get greater profits
Greater capital or money can affect the profits that will be generated. In general, the greater the capital will bring more and more profits. This is because traders with large capital have the advantage of getting the opportunity to deal with larger sizes. But even so you also need to be careful because even though you have the opportunity to get bigger profits, of course the risk of loss will also be greater
The greater the capital, the greater your trading system will survive the possibility of loss
As good as any trading system you have, surely you will experience a loss or loss too. Well, this is where the amount of trading capital will determine how strong the risk management resilience continues to run as long as it bears losses, break even or break even then profit.