Is $5,000 enough to get started with trading?

Quote from CallsnPuts:

That's my opinion... I know that 5k isn't enough.

But if you asked, if 100k is enough. I would say:

Spend 50k educating yourself and start trading with the remaining 50k.

I think that you will have a chance to succeed.
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oh, yeah, and with the other half, $50,000 allow for the

commute expense,
lunch expense,
machine / software / training / chatroom expenses,
cell phone and high speed access expenses,

oh yeah, and with the other half, allow for the

trades slippage,
trade throughs
trade failures where you breakeven except for commissions
trade gains that don't yield all that could have been earned...

yeah $250,000 should be enough....

now that really raises the bar on the discussion,,,

where did we start at? $5,000 :D
 
If he starts trading futures (or any other highly levered instrument) with 5K his risk of ruin (RoR) is probably 95%. If he trades with less leverage with his 5K then he has a chance to lower his RoR to about 75%, and lengthen his learning time from days/weeks to month/years. Not good odds of success but there is always a chance.
 
It may very well be that most people starting with a small account don't end up making it, but IMHO this has nothing to do with the actual amount of money. Rather it is because most of those people didn't have the correct preparation/education for trading, where as those with more money will more often spend more money on getting educated.

Therefore: someone with $5000 has almost the exact same chances of making it as someone with $50,000 who has the same education that he does. If they know what they're doing or have someone good coaching them, they'll both make it. If not, they both won't.

All the best,

Phil
 
Quote from CaptainJack: This thread has reinforced a valuable lesson: No matter what your idea/goal/dream is, there is someone, somewhere who will try to knock it down. Usually because if it isn't something they can accomplish, they don't want anyone to accomplish it. If someone had asked, "Is $100,000 enough to start trading", I imagine the responses would have been eerily similar... There are oodles of stories of people who have started with less in all kinds of entrepreneurial (sp?) endeavors and made it. Get your glasses half full folks!
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True.

The point has got lost on this thread. You can dick away $100,000 as easily as $5000.

It is about wanting to win. Start with $5000. A small amount tells you continuously you cannot afford to lose much. It is very very self disciplining to work a small amount into a bigger amount.

It is a test of yourself. Go to it.
 
Quote from MarketRabbi:

It may very well be that most people starting with a small account don't end up making it, but IMHO this has nothing to do with the actual amount of money. Rather it is because most of those people didn't have the correct preparation/education for trading, where as those with more money will more often spend more money on getting educated.

Therefore: someone with $5000 has almost the exact same chances of making it as someone with $50,000 who has the same education that he does. If they know what they're doing or have someone good coaching them, they'll both make it. If not, they both won't.

All the best,

Phil
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Have you ever played poker where one guy has a huge bankroll and everyone else at the table has a small bankroll? The big fish can push the little fish around because one wrong move by a little fish means he is out. Of course, one or two good breaks and the little fish isn't so little anymore... But in any endeavor involving money there is a minimum critical mass necessary to have a good chance of a successful campaign.
 
Quote from abogdan:

A little bit of history.

I started in 1990 with 5K. Lind-Waldock account with $30 commissions per trade. Back in the days! I've lost it all. Did learn something though! Borrowed 10K (never ever, ever, ever do it!) Lost it too! Got the margin call on 10 contracts of Canadian Dollar. Borrowed another 10K. Learned a lot!!! Quit trading for 2 years, worked 3 jobs, 18 hours a day to pay the loan back. Read a lot of books, bought a lot of courses. Started trading again. Broke even in my first year. Learned some more! Bought Trade Station, eSignal etc. started to develop my own systems. Made 10K profit in 1994! Went back and spent 1 year trading and studying. Made my first 25K profit in 1996. Working day job and trading in between. Built my first system and made 92K in 1999! Never looked back since. So, i did start with 5K. Took me over 13 years to learn how to trade. You decide now!
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good post
 
Quote from abogdan:

A little bit of history.

I started in 1990 with 5K. Lind-Waldock account with $30 commissions per trade. Back in the days! I've lost it all. Did learn something though! Borrowed 10K (never ever, ever, ever do it!) Lost it too! Got the margin call on 10 contracts of Canadian Dollar. Borrowed another 10K. Learned a lot!!! Quit trading for 2 years, worked 3 jobs, 18 hours a day to pay the loan back. Read a lot of books, bought a lot of courses. Started trading again. Broke even in my first year. Learned some more! Bought Trade Station, eSignal etc. started to develop my own systems. Made 10K profit in 1994! Went back and spent 1 year trading and studying. Made my first 25K profit in 1996. Working day job and trading in between. Built my first system and made 92K in 1999! Never looked back since. So, i did start with 5K. Took me over 13 years to learn how to trade. You decide now!
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His experience is probably more typical than not for *successful* traders.

Yes, one can trade with $5,000, but shouldn't expect to make enough to live on. Trade the QQQ, SPY, or some other non-leveraged vehicle and learn the process. Don't be too disappointed if you've made little progress after several years.

The experience will either "keep energizing you to do better" until you get it, or bust you out and make you quit.
 
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