The forex market is very time-sensitive. You might see a trading opportunity right now, but in the next moment, it might not be there. Any significant economic or political move in the global market might cause volatility in the forex market. In this discussion, we will walk you through how an instant funded account helps traders capitalize on the forex market movement.
If you are a professional forex prop trader with years of trading experience in the market, you need an instant funded account. Proprietary firms offer skillful traders an opportunity to trade with the firm’s capital. Traders can go for an account that they can access instantly without having to go through a long evaluation process.
So, traders can utilize trade opportunities caused by market volatility and the price movement of currencies. Besides, professional traders can identify technical patterns on the chart, which can bring trading opportunities. With an instant funded account, traders can catch such trading opportunities.
What Is Momentum Trading in Forex?
When the forex market shows volatility and traders make it work in their favor by trading profitably, it is referred to as momentum trading. As a professional prop trader, you can take part in momentum trading if you see the currency price moving strongly upward or downward. If you see the price going upward with high liquidity (buyers and sellers present in the market in high numbers) in the market, you can purchase it at a lower price and sell it when the price goes up.
Similarly, you can make money when the price goes down. You sell at a high price and purchase at a lower price (which is called ‘shorting’ in trading terminology). Such one-sided movement can be seen when there is an important economic event or global economic news in the forex market.
Professional prop traders utilize such opportunities with the help of an instant funding prop firm.
What Are Instant Funded Accounts?
When traders want to catch the market momentum, an instant account can be the best option. For example, say you are a prop trader with years of experience. You had been working in a small firm as a prop trader, trading in the forex market. Now you want to utilize your potential in trading on a large scale.
So, you look for proprietary firms that will lend you their capital to trade in the forex market. Now, one such big prop firms offer you an account without evaluating your trading skills (as you already have experience in the field). Such an instantly offered account with funds is called an instant funded account.
Some prop firms may also ask you to pass their one or two-step evaluation challenges to evaluate your trading skills.
How Instant Funding Helps Traders Ride Momentum Faster
Immediate access to the firm’s capital and instant market entry are some of the exciting benefits of an instant funded account.
Immediate Market Entry
A forex trading platform that offers instant funded accounts helps traders access the forex market trading opportunities instantly. If you are a professional prop trader, you can enter the market as soon as you see an opportunity.
You don’t need to waste time participating in the prop trading challenges.
Higher Leverage and Capital Access
In forex trading, you get high leverage against the capital you are allowed to trade with. For example, some trading platforms offer a 1:30 leverage ratio. It means, if you deposit $1,000 capital, you can trade with $30,000 worth of money.
Such high leverage is suitable for day traders, scalpers, and news traders. They can amplify gains during short bursts of momentum with more buying power.
Boost in Trader Confidence
As traders do not use their capital to trade in the market, they can trade without mental pressure. It helps motivate traders to make risky trading decisions, which might yield them high profits. But this might have been difficult if they had traded with their capital.
Best Momentum Trading Strategies for the Forex Market
Market momentum can be tracked using several indicators. These indicators use mathematical formulas to make your forex trades flawless.
MACD (Moving Average Convergence Divergence)
It is an indicator that indicates the forex market momentum. When you see the MACD line crossing the signal line from above, it suggests a possible uptrend. On the other hand, a possible downtrend is supposed to be in the market when the MACD crosses the signal line from below.
RSI (Relative Strength Index)
The indicator moves between 0 and100, giving signals of uptrend and downtrend in the market. If the line crosses over 50, it means a strong uptrend is in the market, while going below 50 means a possible downtrend. Based on the signal provided through the RSI, prop traders trade in the forex market.
Stochastic Oscillator
This indicator takes all the closing prices of the currency pair and identifies the trend in the market. If the stochastic value is more than 80, it indicates the currency pair is overbought. So, traders might go for shorting the pair and profit from their trade when the price starts to go down.
On the other hand, a value less than 20 indicates oversold. So, traders go long (buy the currency pair) and profit when the price goes up.
Risks and Considerations
When you become a professional trader in an instant funding prop firm, you might have to meet the profit target. You might also limit your overall losses for the week or day. These rules are there to limit trading risks.
Remember, you might have to pay a bit more to get an instant funded account on a forex trading platform.
Get an Instant Funded Account to Capitalize on the Market Momentum
An instant funded account motivates prop traders to make trading decisions without worrying too much about the risk. If you are a professional forex trader, you will be able to jump into the forex market and catch the market momentum with an instant funded trading account.
