How much is enough to start trading?
- Thread starter hermit_trader
- Start date
I have found the best answer to be for a new trader to start with enough that you do not need to make money for the first 6 months. Not to say that you won't make money, but the people who are trying to learn to trade while at the same as needing to make money to pay bills usually fail from what I have seen. But if you can sit down and plug away with the idea that you are trading small until you learn how to trade correctly, without regard to the fact that you may be making $100 a day, and only step up when you really understand what you are doing, you have the greatest odds for success.
The six month rule was what guys told me when I started, and what I tell anyone who asks me. If you are strapped for capital, go to one of the prop firms that doesn't require much, but have enough set aside or have such an income working at night or in reserve so that you don't have to touch your account for the first 6 months.
Good luck,
Jim
The six month rule was what guys told me when I started, and what I tell anyone who asks me. If you are strapped for capital, go to one of the prop firms that doesn't require much, but have enough set aside or have such an income working at night or in reserve so that you don't have to touch your account for the first 6 months.
Good luck,
Jim
Magna, why are you always disappointed by my comments? You always take my opinions as complaints. In fact, I just point out the harmful problem with this broker.
Quote from Magna:
Assuming you're talking about IB why not try RB&H as acrary (right above you) suggested. That way, I'm sure in no time flat, you would have a new broker to complain about....
I would like to second Magna's comments on the importance of being realistic about this game...
Moreover, I will give my 2 cents on this... unless the market conditions are piss easy (i.e. trending every day for months on end - my implicit assumption is that newbies require solid trends to make up for their numerous mistakes), it is my opinion that the overwhelming majority of people who try to daytrade will blow up on the first attempt (and indeed, the majority of those who re-attempt to daytrade after blowing up first time will blow up 2nd time too)... bearing that in mind, I would set definite loss targets (my personal feeling is that a newbie should trade very small and quit after losing $10k)...
Once you have blown your $10k away (and most people will, make no mistake about it), then review all the stupid mistakes that you made (indeed, which everyone makes), and rebuild your $10k learning curve grub stake in paid employment (unless you have existing reserves of risk capital)...
Second time around you will make it if you have what it takes and have done your homework on the failures of your initial journey into trading...
If you blow up 2nd time around, you should seriously question whether trading is for you (some people are just not cut out for trading, just like some are not cut out to be doctors or lawyers)... I believe that the much touted 95% failure rate in daytrading is in the correct ballpark...
Moreover, I will give my 2 cents on this... unless the market conditions are piss easy (i.e. trending every day for months on end - my implicit assumption is that newbies require solid trends to make up for their numerous mistakes), it is my opinion that the overwhelming majority of people who try to daytrade will blow up on the first attempt (and indeed, the majority of those who re-attempt to daytrade after blowing up first time will blow up 2nd time too)... bearing that in mind, I would set definite loss targets (my personal feeling is that a newbie should trade very small and quit after losing $10k)...
Once you have blown your $10k away (and most people will, make no mistake about it), then review all the stupid mistakes that you made (indeed, which everyone makes), and rebuild your $10k learning curve grub stake in paid employment (unless you have existing reserves of risk capital)...
Second time around you will make it if you have what it takes and have done your homework on the failures of your initial journey into trading...
If you blow up 2nd time around, you should seriously question whether trading is for you (some people are just not cut out for trading, just like some are not cut out to be doctors or lawyers)... I believe that the much touted 95% failure rate in daytrading is in the correct ballpark...
I think $3,000-4,000 is a good amount. I started with that much not long ago. You can't make a living trading full time with 3K, but, why would you expect to if you are just starting?
Actually, a better idea is start with zero. If you are successful at that, then start using real money.
Jack
http://www.pupisup.com
Actually, a better idea is start with zero. If you are successful at that, then start using real money.
Jack
http://www.pupisup.com
My two cents ...... The amount of time it will take to build a profitable trading business is directly proprotional to the amount of capital available to start the business.
If you are just starting out then some small amount - like 30 - 50 K - might be OK to learn with and you might survive and make enough to live on provided you have very low living expenses (you are in school or living at home).... If you want to make a profitable business in trading - assuming you have the necessary knowledge, skills, and experience - then IMHO you should have 100K or better available for the startup. This amount includes paying yourself a salary and funding your trading accounts. You need to factor in paying yourself a salary while you are unprofitable - perhaps as others have said 6 months, but IMHO a year is a more likely number.
If you are just starting out then some small amount - like 30 - 50 K - might be OK to learn with and you might survive and make enough to live on provided you have very low living expenses (you are in school or living at home).... If you want to make a profitable business in trading - assuming you have the necessary knowledge, skills, and experience - then IMHO you should have 100K or better available for the startup. This amount includes paying yourself a salary and funding your trading accounts. You need to factor in paying yourself a salary while you are unprofitable - perhaps as others have said 6 months, but IMHO a year is a more likely number.
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Helps if you have home debt free + an ample savings account.You do not want to be pressured to trade,especialy when starting.
