ACCESS TO THE MARKETS FOR RETAIL TRADERS
Posted on 25th January 2022
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.
All of this means that as a retail client, you can start trading with a funded account with as little as £500-£1000.
You will still have to be educated on the risks involved in trading, and you will have to adjust your expectations in regards to the returns that can be made from a much smaller account size, but it still allows access to many more retail clients than ever before. With the appetite for being in control of your own financial future increasing, this can only be a good thing.
At Key Zone Traders, we still recommend you educate yourself on the high degree of risk involved in trading, as well as build a solid foundation of knowledge, skills and processes, before committing your hard-earned money to the markets. The good news is this can also be done in a safe environment, as the majority of brokers also allow you to open and trade a demo account before opening a live funded account with them.
#MakeItHappen #KeyZoneTraders #ValuTrades
Tagged as: #MakeItHappen #KeyZoneTraders #ValuTrades
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