(courtesy of TheFXAdvisor.com) http://www.thefxadvisor.com/posts/2010/01/the-importance-of-your-trading-capital/ ---------------------------------------------------------------- Never underestimate the power of money. A lot of brokers offer you the possibility of opening up an account for only $250, but thatâs only a good sum to start learning with. And I do recommend you start learning with your own money. However, there are some traders who think that putting $1000 or $2000 in their trading account is going to bring the millions. Now, this might happen if you are patient enough, but itâs gonna take a looong loooong time. The thing is that these traders want to get up as quick as possible and assume huge risks. And one attempt after the other, they fail. The facts are simple. If you are a good daytrader and you manage to get about 10-15% of profit on a monthly basis you can consider yourself lucky. In this case, your risk is still high, but for someone that knows what heâs doing, itâs acceptable. Now, you realize that in order to make a living, you gotta split these 10% of revenue per month into money that pay for your expenses and money that returns to your trading account for a good compounding ratio. If you have $1000 in your account, then $100 revenue wonât do you any good. So think about it. Think about your expenses, how much you need to cover, and then think that in order for your account to grow and compound, you need to have at least 80% of your revenue return to your trading account. So, you spend $2000 per month? Ok, then $8000 needs to return to your account, meaning that $10.000 has to be your revenue for the month. Now, if $10.000 is 10% of your account, then your account should be somewhere at $100.000. This is an account that CAN but itâs not guaranteed TO, help you make a living out of trading. A far cry from your $250 starting out account. The higher you go, the better it is, the smaller your risk, the happier and more relaxed you get, which in turn makes your trading worthwhile and fun. Now, if youâre serious about trading, you need to learn with your own money. So start out with a small sum, but when you get consistently profitable and consider trading for a living, then the next step is to find a way to get really big money in your account. For this, you either do something else, like a business of some sort while keeping in touch with your market, or if you have considerable monthly income, start saving. Hope this helps you in the long run.