Is it possible to start trading with 100 $?

Can I start day trading with 100 dollars?

Because forex provides trading opportunities using low capital, of course, it is possible to start trading with only 100 $.

Then what if you only trading with100 $ capital, we will return to continue the discussion for margin trading this time with the example of using only 100 $ capital.

In this example, we will use a broker that has policy a **margin call of 100% level and stop out level of 20%,** what will happen let’s discuss it together.

TenkoFX broker provides services to traders on forex trading, CFDs and crypto trading.

Margin calls and stops out levels depend on the selected account type, you can read it on the account trading page

Open account or try Demo account.

## The first step is to deposit funds to a trading account

How to deposit funds to a trading account, you can contact the broker to ask about the payment system received at the company, because you trading with 100 dollars so you need a deposit amount $100 into your account trading.

After you make a deposit, now your **account balance is $ 100.**

Now you will find your account condition as in the image below because you do not have an open position.

### The second step calculates the required margin

After you make a deposit then you want to open a transaction on EUR / USD pairs with a **Sell position at 1.20000 with 5 micro lot**, which means **1000 units x 5** with a margin requirement of **1%.**

What is the required margin needed to open this position? let’s calculate.

Because your account is denominated in USD, **you need to convert euros to USD**.

€ 1 = $ 1.20 €1,000 x 5 micro lots= € 5,000 € 5,000 = $ 6,000

The current **national value is $ 6000.**

Now we will calculate the required margin because we have obtained national value data and margin requirements.

In the previous discussion, we also did the same thing to calculate the required margin by using the formula as the following.

Required Margin value = Notional Value x Margin Requirement $60 = $6,000 x .01

From the calculation above, we get the value for the **required margin of $ 60.**

### The third step calculates the used margin

You open a position with 5 micro-lots, and no other positions are open, and we have calculated the national value with 5 micro lots to calculate the required margin.

So the value of **used margin = $ 60**

### The fourth step calculates equity

To calculate the value of equity, we must know the value of floating profit/loss.

Assuming after you open a position then the price moves according to the direction of the position and reaches breakeven, or** floating profit/loss = 0.**

How to calculate equity is the same as using the formula as we did in the example of the previous chapter as follows.

Equity = Account Balance + Floating Profits/Losses $100 = $100 + $0

From the calculation above we get data for an **equity value of $ 100.**

Up to this point, we have obtained data:

- Account balance = $ 100.
- Used margin = $ 60.
- Equity value = $ 100.
- Floating profit/loss = 0

### The fifth step is calculating free margin

To calculate the free margin we only need the data used margin and equity, how is it the same as what we did in the previous chapter using the formula as follows:

Free Margin value = Equity - Used Margin $40 = $100 - $60

From the above calculation, we get a **free margin data of $ 40.**

Until here we get the data with follows:

- Account balance = $ 100
- Used margin = $ 60
- Equity value = $ 100
- Free margin = $ 40
- Floating profit/loss = 0

### The sixth step calculates the margin level

How to calculate the margin level we need data equity value and used margin multiplied by 100%.

Same with how to calculate the margin level in the previous chapter by using the following formula:

Margin Level value = (Equity / Used Margin) x 100% 167% = ($100 / 60) x 100%

From the calculation above, we have got value for the **margin level of 167%.**

Until here you have not reached the margin call level value at 100%, meaning you are still possible to open new positions.

But you also have to pay attention to opening a new position will increase the used margin which means it will reduce the value of the margin level.

Until here you will see the condition of your trading account will appear as shown below.

## The trading scenario of EUR / USD arises up 80 pips

A few hours later after you opened a position it turned out that EUR / USD moved in the direction where the pair rose **80 pips and now is at 1.2080.**

This means that the movement of price against your Sell position on EUR / USD, so you will find floating loss.

Now we will recalculate to find out the effect of this price change, let check it out.

### The first step is to calculate the used margin

In this condition, you will find your used margin change because the national value also changes.

Why has the national value changed? Because exchange rates have changed and this is what causes national values to change.

Therefore we need to recalculate to get the value of the used margin by first calculating the required margin value.

Because your trading account is denominated in USD, you need to convert euros to USD to get national value.

€ 1 = $ 1.2080 €1,000 x 5 micro lots= € 5,000 € 5,000 = $ 6,040

From the calculation above, we get a **national value of $ 6,040.**

Previously the national value of $ 6,000, when the pair EUR / USD at the price of 1.2000.

Therefore EUR / USD moves up, it’s mean that the value of the Euro strengthens against the USD, thereby increasing the national value.

This is because your account denomination is in USD.

Next, we will calculate the required margin using the national value times the margin requirement, as we did before.

Required Margin value = Notional Value x Margin Requirement $60.40 = $6,040 x .01

From the calculation above, we find the value of the **required margin has risen to $ 60.40.**

Previously the required margin when EUR / USD at the price of 1.2000 was $ 60, it’s mean that now it has risen by $ 0.40.

When you see a change in the value of the used margin it reflects the change in the required margin.

Because in this example you only have one position with 5 micro lots, the value of the used margin is the same as the required margin, in this case, **$ 60.40.**

### The second step calculates floating profit/loss

EUR / USD has risen from 1.20000 to 1.2080, this means there has been a difference of **80 pips.**

Because of your position in the micro lot, the value of 1 pip is equal to $ 0.10.

You open a position of 5 micro lots so that all values are **5 x $ 0.10 = $ 0.50.**

Because you are short, you get a **floating loss of $ 40**, this is by calculating the value per pips multiplied by the amount of the price difference.

We can use the formula to calculate floating profit/loss as follows:

Floating Profit/Loss = (Current Price - Entry Price) x 10,000 x $X/pip $40 = (1.2080 - 1.20000) x 10,000 x $0.50/pip

### The third step is calculating equity

To calculate the value of equity we use the account balance data minus the floating profit/loss value.

If it is written in the formula it will be as below.

Total Equity = Balance + Floating Profits/Losses $60 = $100 + (-$40)

It turns out that after calculating the value of your **equity has dropped to $ 60.**

If previously your equity value was $ 100 when you got floating profit/loss = 0, now your total equity is only $ 60.

Until here we get the following data:

- Account balance = $ 100.
- Used margin value = $ 60.40.
- Total equity = $ 60.
- Floating profit/loss = -$ 40

### The fourth step calculates the free margin

To be able to calculate the free margin we need the equity data deducted by the used margin, if it is written in the formula it will be as follows:

Free Margin value = Total Equity - Used Margin -$0.40 = $60 - $60.40

After doing the calculation as above we find the value of the **free margin is now below 0 and has a negative value of $ -0.40.**

### The fifth step calculates the margin level

How to calculate the margin level is the same as what we did before when you find a trading account with floating profit/loss = 0.

By using equity data divided by used margin multiplied by 100%.

If it is written in the formula it will be as below:

Margin Level percentage = (Equity / Used Margin) x 100% 99% = ($60/ $60.40) x 100%

From the calculation above, the value of your **margin level percentage has dropped to 99%** if previously it was 167%.

### Margin call 100%

Because your margin level percentage is now only 99%, this means your margin level is below 100% which is the value of the margin call that the broker determines.

Therefore you will **get a warning via email or telephone that your margin level is too low** so to maintain the position possible with the warning you will add a new deposit to increase the value of the margin level

In this condition, your position is still open, but you are not allowed to open a new position until your margin level rises above 100%.

At this point, your trading account trading with 100 dollars condition will look like the image below:

## Trading scenario EUR / USD climbs 176 pip

When you open a Sell position on the EUR / USD pair, of course you expect the price to go down, but it turns out the price actually went up and now it is at 1.2176.

This means there is a difference of 176 pips from the initial price of 1.2000 when your position is open.

### The first step is to calculate the used margin

EUR / USD is now at 1.2176, this means that there has been a change in the national value, so the calculation of the used margin will also change.

Next, we need to calculate the national value first before calculating the required margin.

Because your account is denominated in USD, you must convert euros to USD to determine national value.

€ 1 = $ 1.21760 €1,000 x 5 micro lots= € 5,000 € 5,000 = $ 6,088

The current **national value is $ 6.088**, which means there has been a change in the national value of $ 0.088 when the price was at 1.2176, from the previous $ 6,000 when the price was at 1.2000.

Then we will calculate the required margin to get the value of the used margin.

By using the national value data multiplied by the margin requirement, here the margin requirement is 1%.

Required Margin value = Notional Value x Margin Requirement $60.88 = $6,080 x .01

From the calculation above, we get the **required margin value of $ 60.88.**

Previously the required margin was $ 60 when EUR / USD was at 1.20000, and $ 60.40 when EUR / USD was at 1.2080.

When you find the value of the used margin changes, it reflects the change in the required margin.

**Because you only have one position, the value of the used margin is the same as the value of the required margin, in this case, it is $ 60.88.**

### The second step calculates the floating profit/loss value

How do you calculate the floating profit/loss we first calculate the difference between the price of the open position and the current price.

In this case, the price has gone up from 1.2000 to 1.2176, meaning that there is a **difference of 176 pips.**

Because you open a position with a **micro lot then the value per pip = $ 0.10** and you open a position of 5 micro lots so your value per pip floating loss is $ 0.50.

Because there has been a price difference of 176 pips your total **floating loss is $ 88.**

Why do you find floating loss? Because you open a short position while the price goes up, it’s a different case if the price goes down.

We can use the formula as below to calculate floating profit/loss as we did before:

Floating Profit/Loss = (Current Price - Entry Price) x 10,000 x $X/pip -$88 = (1.21760 - 1.20000) x 10,000 x $0.50/pip

### The third step is calculating equity

Same as what we did before, to calculate total equity we use the account balance value data plus floating profit/loss.

To be easier if written in the formula will be like below:

Total Equity = Account Balance + Floating Profit/Loss $12 = $100 + (-$88)

With the calculation above, you get the **total value of equity now is only $ 12.**

### The fourth step calculates free margin

How do you calculate this free margin? We use the equity data deducted by the used margin so that if it is written using the formula, it will be as follows.

Free Margin value = Equity - Used Margin -$48.88 = $12 - $60.88

From these calculations, you find that your **free margin is already negative and is at – $ 48.88.**

At this point, we have collected data on when EUR/USD rises 176 pips

- Account balance = $ 100
- Used margin = $ 60.88
- Total equity = $ 12
- Free margin value = – $ 48
- Floating profit / loss = -48.88.

### The fifth step calculates the margin level

How to calculate the margin level is to use equity data divided by the used margin multiplied by 100%.

If it is written using the formula it will look like this, and we can calculate it.

Margin Level percentage = (Equity / Used Margin) x 100% 20% = ($12 / $60.88) x 100%

By looking at these calculations we now get a **margin level percentage of only 20%**, this means that it has reached the stop out level set by the broker.

What will happen next?

Now we will see the condition of your account trading with 100 dollars when a EUR / USD pair climbs 176 pips, this can be seen as shown below:

## Stop out level reached

Now your margin level is only 20%, it’s that this has **reached the stop out level of 20%** from the broker.

Therefore you will see that the broker’s platform will automatically close your open trading position.

And there will be three things as follows:

- The used margin will be released.
- Floating profit/loss will be realized
- Your total account balance will change with the remaining funds

Now the condition of your account is flat, where the amount of account balance, equity, and the free margin is the same because there are no more open positions.

If likened to a traffic light, this stops out is a red light and you cannot continue your journey.

Now your trading account condition trading with 100 dollars will look like in the image below:

It’s sad because the remaining funds are **only $ 12,** while your first deposit is $ 100, so you **lose $ 88** of your money.

Then what percentage of your total loss? To calculate the gain/loss we use the formula below:

Gain/Loss percentage = ((Ending Balance - Starting Balance) / Starting Balance) x 100% -88% = (($12 - $100) / $100) x 100%

From this calculation, the **percentage of your loss is 88%.**

Now it can be said that your account is already dead, unable to open new positions unless you do a replenished account.

## Final thought

Trading forex with 100 $ is doable, but you certainly have to really use margins wisely, and look for the best momentum so that the first position will get a profit.

This is one of the advantages of the forex business because it can start with low capital, so you can start trading with 100 dollars, but it would be better before spending your real money first to learn a demo account until you really know your trading performance.

**Open account or try Demo account
**

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