FAQ How Much Money Does a Trader Need To Start Trading?

[Aesop20]

Would anyone recommened starting with a smaller amount to find your footing and get used to the emotions of live trading, and then as long as it's all going well, increase the pot size. That's how i figured i'd start, to make some initial gains and then see from there.

 

[Raleigh Lee]

You need enough money for your margin requirements first. If you plan to put on more than one position simultaneously, then you need the margin requirement for one position multiplied by the maximum number of positions you plan to put on simultaneously.

Then you need an amount equal to 3 times your maximum drawdown, defined this way: the distance between a high point in equity followed by a lowest point in equity until a new high is made.

 

[Aesop20]

I'd suggest you also need to be trading with money you don't mind walking into the street with and throwing into the air and walking off

 

[thirstytrader]

I'd suggest you also need to be trading with money you don't mind walking into the street with and throwing into the air and walking off

this makes no sense, I don't care how much money I have I would never be throwing it to the wind. Now, if you're using your rent money to trade than that's another topic, the emotional aspects of trading are the biggest issue's and that has everything to do with the relationship we have with our money. Most people worked for it so the barrier is there and they don't want to lose it.

a YouTube video has an interview with a trader named Peter Millman and he talks about separating yourself from your money in order to become a good trader, 2 minutes later he says that the stress is so deep sometimes that he cant feel his extremities? why would he be stressed since he separated himself from his money? nobody ever separates themselves from their money, some people just cope better with the loss.

 

[Commodity_Trader]

depends on timeframe of trading & percentage of s.l per trade. for example if u have a retail account with 10k $ fund & wanna risk 1 %, you should trade currencies in 5 minute cuz in this timeframe s.l is normally 5 to 10 points which is compatible with money management . for example u can not trade DAX future in 5 minute cuz 5-10 points of DAX futures would cost much more than 1 % of your account & violate money management rules. rather u can trade it in 1 minute timeframe.

with this approach u can trade almost anything above 1000 $ and u should trade on micro account

 

[Michaelball]

i would say start cdf trading and with an amount of £100, see this as your learning fee.. you can trade as small as 0.01 contracts, but i would suggest trade indexes and 0.2-0.5 size contracts and don't expect to be driving a Ferrari after a week..

with cdf index trading you are 99.75% leveraged, so no need at all to have a big account size for new traders, the broker will more that likely try to get you to put your maximum in but £100 would be more than fine. individual stock research is to much hard work for new investors/traders, index trading is more easier, and you get a chunk of the whole market

 

[Thriyve]

I think the best way to figure this out is to first learn how to trade after you picked what you would like to trade. Once you have developed a trading strategy, and tested it in a demo account, you will be able to reverse engineer the answer. You want to make sure that no individual trade or series of trades (your max estimated downdraw) would 'put you out of business'. Trading is of course just a numbers game.

Happy Trading

 

[WR1]

5-10k in £ or $

no point starting on 100 - once its gone it will end up 100 then 500 and another etc etc
unless you v'e found the holy grail which is unlikley!

save up the rest and demo to you have it, as that's the real amount of time to learn anyway
3-5yrs

trading on scared money with small stops isn't going to work for long and maybe not even for a day, and besides we can trade with thousands on demo and never loose a penny

if you don't have a driving license - you should nt be driving anyway - same with trading, no training and a good system and it will end in a crash, so no point giving the market makers and such like out hard earned money

win 150K on demo (with proper Money management and stake sizes) and then you re about ready

 

[ritzn75]

You can xstart trading from even $100 by opening a Cent Account. In my opinion the question should be how much spare cash do you have, which you are ready to loose.

I have advised to use following formula when it comes to Money Management
x = y/10, where X is First Deposit in a trading Account and y is the Total amount available.

when your trading account is up by 25%, then deposit another x.

If you lost x, then start with x. this way you will have 10 chances before you will blow all your Forex Money.

 

[adeelyaz]

i am agree with others thread replying traders that a newbie must start frex trading with at least $100 on micro account and after making skill and learning he must start trade in real trading.this is good for a newbie because y doing so he can reduce loss in trading in the begining.

 

[Allys]

i am agree with others thread replying traders that a newbie must start frex trading with at least $100 on micro account and after making skill and learning he must start trade in real trading.this is good for a newbie because y doing so he can reduce loss in trading in the begining.

Absolutely sure, that it should be around $100 on micro account. This is the amount that is not so painful to lose though profit won't be huge also. But the valuable real trading experience will be gained! Thanks god there is plenty of brokers offering micro accounts. LiteForex, Profiforex, FXCM, Forex.com, etc.

 

[neil]

I am just starting and have £5k to invest I have already decided that i will use stop losses always. Have stops set to max 2% of my account as a drawdown. All I need to do now is learn to trade and get a system going that gives me 50% winners and a 2:1 points win/loss ratio and Im in business.

At least your post shows you are at least thinking along the right lines but it's not that easy or everyone would be rich. So try the beginner threads on this site, read the live trading thread(s) and be selective in whom you read here. Then demo for a while.
Good luck.

 

[Dinos]

I keep a balance of approximately 10 times my margin deposit requirements, no point in having any more money than necessary sat around if your not using it. Suits my trading style fine, I day trade only, aiming for 3 to 5 trades a day, with only 1 trade open at any time, gives me sufficient funds to cover 10 losing trades in a row, my largest losing sequence being 3 in a row.

Each to their own.

 

[mik1973]

I don't think paper trading is good at all. I'm pretty sure anyone who has paper traded finds that they are quite successful in the fake world of trading but when it comes to putting their money on the line things don't seem to work out. Far better to open an account where you can trade for small amounts (not sure if some firms still offer 10p per point ) in order to experience some emotional attachment. If you're still in fear of trading at these starter rates then maybe you're in the wrong business.

 

[brettly]

Been trading on a demo account for only 2 weeks with very small amounts. Looking to start with real money, so just reading through this thread.. $1000 start would be the minimum? and 2-5% trades (20-50$)? Currently using Plus500 and no fees (or barely)

 

[malaguti]

Been trading on a demo account for only 2 weeks with very small amounts. Looking to start with real money, so just reading through this thread.. $1000 start would be the minimum? and 2-5% trades (20-50$)? Currently using Plus500 and no fees (or barely)

I'd say wait a bit longer on your demo, if you are still positive after another month or two then you might have something. Dont rushwith your real money, markets will always be there tomorrow. But 1000 is a good amount. Thats how I started...after I had a good strategy that is

 

[brettly]

I'd say wait a bit longer on your demo, if you are still positive after another month or two then you might have something. Dont rushwith your real money, markets will always be there tomorrow. But 1000 is a good amount. Thats how I started...after I had a good strategy that is

Yea malaguti.. i have every intention of staying with the demo for 2-3 months at least. Have made a few losses and gains (minor) and trying to act with the vitual money (25,000) as being only 1000 . Moreso trying to see which forex and shares im interested in working with, and what their pattern of highs and lows is doing over time. It can be volatile and guess work ive noticed but you have to follow and understand some patterns.

 

[TheLastBear]

Yea malaguti.. i have every intention of staying with the demo for 2-3 months at least. Have made a few losses and gains (minor) and trying to act with the vitual money (25,000) as being only 1000 . Moreso trying to see which forex and shares im interested in working with, and what their pattern of highs and lows is doing over time. It can be volatile and guess work ive noticed but you have to follow and understand some patterns.

I just hope you wont fall into the same pattern as most who think they can actually learn how to trade in a demo account. They do so good and when they go live they go bust as a demo account will not teach you how to trade.

 

[brettly]

I just hope you wont fall into the same pattern as most who think they can actually learn how to trade in a demo account. They do so good and when they go live they go bust as a demo account will not teach you how to trade.

So a real account will?

 

[neil]

So a real account will?

I think what he means is; your mental approach and emotions will behave differently when trading real money as opposed to pure demo trading.
Try small stakes and observe yourself; maybe a diary will help.