How much do you need?

D

DaveWeis

I'm pretty new to the forums and I like to lurk, but I'm still a total newb either way..
I have been trading pretty actively (Day trades from time to time but mainly swing trades) for about 1.5 years. I am currently in college and I am a year out from graduation and when I graduate I would prefer to begin trading full time. How much money do you feel I need to graduate with in my account? I currently make enough trading to support myself, but luckily I work to pay my bills so my winnings get put back into the market...But I am sure things will change as I graduate college and I wont want to live like a total scumbag.
Anyway, I thought it would be interesting to hear how much $$ you think someone should start out with to go through the good and bad times trading for their first year full time.
 
Full time?

You need to have enough money to pay your living expenses for one year, including data fee's and software and all that.

Then you need your money your going to trade with. If you go to a prop firm, you could probably make it with 10k, just go to a firm where you can deposit 2k, and try and survive the whole year. I figure if you can't trade for around 2 1/2 months with 2k and survive, with 5 shots at it, then maybe it's time to rethink things.

Of course this is coming from a 19 year old who's expenses does not include a house to his own and splits electricity and food and all that.

But a no brainer is, at least have enough to support yourself the whole year and do not touch that money, only use it for paying your expenses, and then have however much you feel you need for trading.

You say you trade pretty actively now and can support yourself.

I don't understand why you need to ask us these questions if that is infact true.

The pressure of making money from trading might totally destroy you, so if you can live without holding that job, might as well give it a shot right out of college, seems like the best time to give it your best. It's better to start small, and have a relatively small account and blow it out several times, instead of having a 10k account and blow that out within 3 - 4 month or something like that.

Start small, trade small, and slowly work your way up. If you go all out at the start, you might not have anything left to actually provide you with solid experience.

When I traded Futures when I first started, I blew out all that money and didn't feel as if I learned anything with that money besides the fact that I better not screw up again, so make it count. Make all your money your dedicating to trading worth it and learn with it.
 
The most important thing you need, and I can't tell you what that amount is.......you need enough money to pay your daily living expenses without causing additional stress for your trading. Day trading is difficult emotionally. I know, I am struggling to make money after a year day trading futures, but my wife pays all of our bills with her salary:)
 
Depends on you.

Some will tell you 5k. Others will say 25k. Still some will say 50k.

Who is right? Who is wrong? Depends on you.

What will you trade? Futures, stocks, options?

I started when I was 17 with 5k trading corn options. Promptly blew out. Dont recall how long it took. Ask Riskarb about options. He will tell you you need to know alot more than what premium is.

Then I went through Ken Roberts. I think I was 19, or 20. 1-2-3 good bye 10k. Hah! Yes, you too can internally finance a bewildering 256 soybean contracts for margin of $500.

Then I went through another 5k with the old mastermind Larry Williams. Think I lost my mind trading someone else's stuff.

What's that 20k so far?

Fortunately I was working on my degrees and starting to buy real estate
so I had some cards to play with if nothing else.

I would not trade those losses for anything. Because the burned hand teaches best.

I started to learn about real risk. Developing some sort of edge. A methodology.

This is the key. You must know 3 things.

Youself.
Your methodology.
Your markets.

If you know those 3 things. You could trade with $500.

But a realistic scenario would be about
5 grand. This is just getting your feet wet $.

To day trade stocks non prop you need 25k minimum. To trade ES, NQ, ER2 1 contract per 10k will let you not trade timidly.

Before you trade may I make three suggestions?

1) Read this by Maverick74

http://elitetrader.com/vb/showthread.php?s=&postid=1088461&highlight=vehn#post1088461

His first post on that page. Excellent advice. You can perform that cheaply. Less than $50 month. Papertrade your one stock everyday. Dont cut corners.
Understand that it all boils down to Price, Volume, Time.

Read that whole thread actually

2) Develop your OWN STYLE. Find your true buddha nature that will let you sleep at night. Can you hold a position for 3 hours? 3 days? 3 minutes? What will take you into a trade? Will will take you out? What will you trade? Gold futures? Msft? Hang Seng Index?

3) Understand that your survival will depend on your "edge" whatever that means to you, AND dealing with your emotions.

A simple illustration.

Take your 5k and go to Vegas, AC, Indian casino.

Play BlackJack for the minimum. What are you doing?

Do you know how to count cards?

Do you know what values to hit/hold?

Do you feel like mini deity when you hit Blackjack or have a run of 5 wins in a row?

How do you feel when you are down to 4k? 2k? $500. Do you just say "hell with it" and bet it all on 1 play?

If you cannot answer even these questions then I submit whatever amount you start with will be not long for your account.

After all that hot air try 5-10k. You can make that fairly quick(employed not trading) with no life responsibilities.

All the best.
 
Quote from JMowery1987:

You say you trade pretty actively now and can support yourself.

I don't understand why you need to ask us these questions if that is infact true.

The pressure of making money from trading might totally destroy you, so if you can live without holding that job, might as well give it a shot right out of college, seems like the best time to give it your best. It's better to start small, and have a relatively small account and blow it out several times, instead of having a 10k account and blow that out within 3 - 4 month or something like that.
More...
I asked the question hoping someone that had been in my situation before would give an estimate of what they started out with so they could speak from experience.
I also dont know what you mean by starting small and blowing out my acct within 3 or 4 months..I havent blown out my account within the last 1.5 years of trading, I have taken some nice losses and some nice wins, I dont really think that my trading strategy will change over to something new on graduation day.

Dand, Thanks..I guess you are right, I can answer my own question. :-)
 
AOK,
Thank you for the response. Right now I trade stock, and I will probably keep it that way, or at least the majority of my funds will be in stock as that is what I have been successful doing.
I will read that link you posted. Thanks again. :-)
 
Quote from cashmoney69:

25,000 minimum for day trading

50,000 average

100,000 above average

I have less than 25k but I dont day trade.

- nathan
More...
That's for starting masochists.
It certainly makes the pain of going broke last longer.

Look at other threads. $5,000 should do. If it doesn't for you, you're not ready yet. You'll not do any better with $25,000+.
 
Quote from nononsense:

That's for starting masochists.
It certainly makes the pain of going broke last longer.

Look at other threads. $5,000 should do. If it doesn't for you, you're not ready yet. You'll not do any better with $25,000+.
More...

I don't know if you could live off 5K starting out. But I totally agree with the rest of your opinion. 5K should be a good start for building a bankroll anyway.
 
As most people have said, you need to make enough to cover your living expenses, which varies for different people.

It depends on how much return you can generate annually, for example if you make a steady 20% annually and you need 20k to meet expenses... then you need an account size of 100,000.

Unfortunately, you're more likely to lose 20k - 50k before you learn how to make money in the markets.

So budget accordingly, lol. :)
 
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