Simple guide: How to become a day trader with only £100
The world knows many real stories of ordinary people making big money from investing a small amount in stocks or cryptocurrency, but these are exceptions to the rule and involve a great deal of luck. When it comes to trading, it is a systematic process of buying at a lower rate and selling at a higher one. To a large extent, you are the architect of your own destiny, so if you’re considering starting to trade, you’re in the right place.
Unfortunately, you can’t start with any amount you want. Most platforms have an initial requirement for a minimum deposit amount, which ranges from 100 to 500 pounds. This is a necessary measure; without a certain minimum investment threshold, there would be an incredible influx of willing participants, and the brokers’ market would simply collapse.
Trading with relatively modest sums has a number of advantages and disadvantages. Therefore, in this article, you will determine whether this option is suitable for you personally and will learn a lot of useful information on this issue.
Can I start trading with £100?
To put day trading in simple terms, it’s a very dynamic style of trading. Everything happens fast, as there is a tighter stop-loss that allows for opening and closing many trades with a small budget. It’s a good way to gain experience and understand the various nuances.
As we mentioned before, most brokers still operate starting with a minimum deposit. In some cases, this amount starts from £100, in others £250 is required, such as on platforms for automated trading, which we will talk about later in the text. However, nearly everyone can afford this sum to find out if this type of activity suits them or not.
One of the main drawbacks of trading small amounts is the significant risk of liquidation with a large leverage. You have a good opportunity to earn relatively big money, but at the same time, there are significant chances of losing money from the trade.
For example, if you open a trade with leverage of 1:125, it means that the trade amount is increased by 125 times. But if something goes wrong and you experience significant market fluctuations, you can lose your money in a fraction of a second.
This is a poor trading style, which more closely resembles playing poker and going all-in. Once you’ve read our article to the end, you’ll understand why this shouldn’t be done, and you’ll most likely settle on one of the initial trading strategies.
Why it’s worth starting to trade with small amounts
Registering and topping up an account for further trading activity is a crucial step in beginning a significant phase of your life. It’s important not to get overly excited during this process and to maintain a degree of cool-headedness. We’ve gathered some key advice that can help you make reasoned decisions.
First steps on the trading platform
Once you open an account, you’ll enter a new world. Even though most trading places have a typical structure, you’ll often encounter banal questions that require time to solve. That’s why it’s not necessary to spend heavily, as in most cases, you may lose a part of your deposit due to simple mistakes.
Perhaps your first trade will be successful, or perhaps you’ll make your first mistake. This isn’t that significant because the experience gained will benefit you in the future. However, almost all trading platforms offer a demo account that helps you understand all the mechanisms. Once you feel ready to trade with real money, take a portion of your bank and confidently conquer the market.
It’s important to understand that the initial small deposit is not intended for making a living, but for understanding all the mechanisms and nuances of trading.
Risk management is the main lesson you need to learn. It involves managing the inevitable risks in trading by identifying these risks, evaluating them, and understanding how to control them.
You will start to grasp the essence only after some time, developing your unique strategy. You can heed advice from others, but you shouldn’t copy someone else’s trading style, as it will only lead to subsequent problems and misunderstandings. Day trading with £100 is a good way to learn how to control the processes without fearing bankruptcy.
Main downsides of trading with a small deposit
At the beginning of the article, we mentioned that trading with small amounts has a range of advantages as well as its downsides, which are also essential to consider.
The problem with high leverage
To earn even a small pleasing amount, many novice traders take risks and set very unrealistic leverage. You may be lucky a few times, and then you’ll lose all your earnings. We strongly advise not to do this, as it’s better to try to earn £10 with minimal risks and understand how it works, rather than using insane schemes.
If you’re trading with a small trading account, you’ll often not have access to high leverage. The main reason is your available margin. Unless, of course, it’s Forex, which seems to be an entirely different universe.
How to start day trading with 100 pounds
We hope our presentation was informative enough, and you understood all the pros and cons of trading with small amounts. Now it’s time to consider the main tips for starting trading.
Search for trade setups that have a high likelihood of success
When trading with a £100 account, there isn’t much room for error, so try to minimize risk as much as possible.
Don’t set your stop losses too narrowly
Tighter stop losses, while they allow you to increase the overall position size for more profit, also increase the chances of losing if you’ve made the wrong pair choice.
Don’t chase big profits
You may be confident in your abilities, but it’s always important to understand that trading is a risky business. It’s better to make a small amount without stress than to worry and take risks.
Follow your trading strategy
Consistency is key in trading. If you have developed a working strategy, you need to stick to it, regardless of the market’s spontaneity at certain moments.
Analyze your trades
Analysis is an influential part of any trader’s work. You should carefully consider both successful and losing trades. Learning from mistakes is very significant in any business, and trading is no exception.
Develop your account responsibly
Don’t fall for theoretical large profits, as we’ve already mentioned, consistency is the main key to success.
Where is it better for a novice to trade?
The final step is choosing a trading platform. Some of them are reliable but may come with difficulties, while others can be called a revolution in the trading world. Let’s take a closer look at some examples.
A revolutionary platform developed based on artificial intelligence. Its main advantage lies in the ability to activate full automation. If you rely more on your knowledge, various analytical reports and helpful tips will definitely be useful, especially for new traders.
SMART STOCKS AI:
Similar in functionality but more advanced compared to the previous one. It has an excellent track record of profitable trades and can analyze and minimize risks. It is also exceptional for beginners.
This platform has an intuitively understandable interface and a wide selection of financial instruments for trading.
It is a popular social trading platform that allows beginners to copy the trades of successful traders. This can be a useful way to learn through practice, especially for newcomers.
It is obvious that in most cases, having $100 on hand, trading may not be very profitable, but it can be your first informative and exciting step in your trading career. If you follow our advice, trading on the chosen platform can become a highly productive experience for the future.
We strongly recommend striving to avoid the mentioned mistakes because trading with small amounts often does not forgive beginners. Try not to make frequent mistakes, and you will achieve success. We believe in you!