Many people believe you need to have a lot of money to be able to get involved in trading the financial markets. Whilst, it is true, you need money to trade – its clear, you cannot make money, without money. There is perhaps a misconception around how much you actually need to participate. 

 

In recent years, the barrier for entry to retail traders has drastically reduced, through a variety of different means. 

 

On some of the most liquid instruments traded globally, brokers have managed to tighten their spreads and create low commissions on major FX pairs and Indices. This allows traders to get involved with some of the most globally traded assets. But I have also noticed that some brokers are offering tighter spreads on more and more instruments, with lower commissions, offering more opportunities for the retail client. 

 

Another way some brokers have reduced the barrier to entry for retail clients is micro-lots. Allowing traders to buy instruments in lot sizes of just 0.01 increments (effectively 10p per point the market moves, for those of you that spread-bet). This allows retail clients to have small account sizes, yet still leverage and risk responsibly in relation to their account size. 

 

In recent years, there has been regulation brought out which has increased margin rates on retail clients. Whilst these have some impact on the amount people can trade, if people are leveraging and risking sensible amounts in relation to their account sizes (here at Key Zone Traders we recommend 0.5-1% with a maximum of 2% risk of your capital per trade), it really does not affect your ability to place trades, and capitalise on the opportunities the market has to offer.