Yah i am not sure I understand the 2520 rules honestly. Everytime I think I have it, either the bank or someone from this list tosses in another piece of information that blows what i thought I understood. I suppose once I exceed $25k the issue will just go away, but I want to make sure I know how to properly maximize the leverage I have available before then without getting myself stuck in a equity call or being forced into cash-only status again.
Minimum required capital
- Thread starter scot.mcpherson
- Start date
Anything in trading is possible for a short while. Suggesting that it's possible to make 10% per week as a general expectation is not realistic and a real trader definitely knows that.
The OP even states "I . . . consistently do about 10% performance per week".
To the OP, if you are trying to figure out how to trade for a living on a $25k account or below depending upon 500%+ returns per year, you are most likely headed for disappointent - especially if you are a white-collar professional trying to replace a decent income, with kids, house, etc.
I was in a similar boat, but my expectations and starting out plan was much different, and I'm still here. Just my personal perspective, nothing more.
No harshness directed at anybody here . . . but believing in irrational and unrealistic claims will limit you as a career trader more than most things.
Keep trading.
No none at all....I am at the moment trying to build my trading equity up to a level that I can sustain myself. I will decide when that is based on what sort of income I am bringing in right now.
My question wasn't really, "how much do "I" need to get started?"
it was really...
How do people reconcile being able to be career traders while claiming to do so with so little money? Especially when the rules technically prevent it.
However I am still very much interested in learning how to maximize what I have. I will be continually investing in my own trading account, and once I break that income barrier and can continue with growth as well, then I will do so...I am not saying how much that will be, I will know ... welll.....when I know...
But I appreciate the input, its ALL good information, even the bad information...I can sort that out for myself. My problem is ensuring I understand the rules of the game, especially while below $25k so I don't get shoved back into Cash-Only.
My question wasn't really, "how much do "I" need to get started?"
it was really...
How do people reconcile being able to be career traders while claiming to do so with so little money? Especially when the rules technically prevent it.
However I am still very much interested in learning how to maximize what I have. I will be continually investing in my own trading account, and once I break that income barrier and can continue with growth as well, then I will do so...I am not saying how much that will be, I will know ... welll.....when I know...
But I appreciate the input, its ALL good information, even the bad information...I can sort that out for myself. My problem is ensuring I understand the rules of the game, especially while below $25k so I don't get shoved back into Cash-Only.
You should have atleast £16,000 caital to be able to do it without too much stress or fear, althoug there still will be some.
I do it with under 1k at moment but the stress of it is extremely high,
and so you should ideally have 16k to start with.
But will need a voltile market to trade, and to be very skilled at making profit already,
not put 16k in an account and then strat trying to learn while needing to make a living from it.
I do it with under 1k at moment but the stress of it is extremely high,
and so you should ideally have 16k to start with.
But will need a voltile market to trade, and to be very skilled at making profit already,
not put 16k in an account and then strat trying to learn while needing to make a living from it.
LOL spanish89, where do you get the £16,000 caital [sic] number from?
Just mentioning a number without giviving substantative information on why you mention it isn't very helpful.
To scot.mcpherson:
You sholdn't take advice from futures traders if you only plan on trading stocks.
They don't. There's nobody in this group who is a "career trader". The rest who claim they do are usually on a simulator or trading between coffee breaks, so they don't get flagged anywhere along the way. Not to mention we're only talking stocks. There are plenty on this board who have given this impression but they're trading futures - where $5k will get you an account that you can trade fifty time per day if you want.
Keep trading.
Maybe for someone young and minimal expenses like yourself. A man with a family and mortgage will need much, much more. The number varies greatly depending on the situation of the individual.
As for saving living expenses in advance, I agree but I place more significance in being able to significantly earn more than what you pay in expenses. I'd suggest capital large enough to allow one to earn an absolute minimum of double their living expenses after tax. The ability to reinvest much (preferably most) of the profit shouldn't be underestimated.
lol
I didnt say that if you have 16k account your are gna make millions, or even gna be able to make a living from it.
I merely said that if you want to try making a living from a low capital size that you should have atleast 16k to be abel to do it without too much stress or fear.
If you have more capital ofcourse that would be better, as the more money you have the less money you need to make to keep living.
But this thread was asking about whats the lowest capital you should start with,
and so i think its around 16,000gbp, providing you have experience in making a living from trading as sole income before that.
And the way i got to the figure 16k is if your a single guy between 18 t 26 living in an expensive area like London then you need about 1,500pounds per month (tax free) to get by comfortably.
(If your over 26 you would ave already had to have found a way to make a living for 8years, and so having a stream of income to support yourself shouldnt be an issue by that age)
But lets say your 23, a decent living salary that you would get in a good level office job is £21,000 per year (after tax thats about 1,500quid per month).
Trading in UK is tax free, and so lets say you need 1,500gbp profit per month.
You trade everyday thats 20days per month, so thats £75 profit per day.
You trade at a nice small size to be cautious, of just £4 per point, you need to just cover roughly 20points profit per day to cover it.
And so 20ticks per day is very very do-able, especially if you trade crude oil or dow.
I didnt say that if you have 16k account your are gna make millions, or even gna be able to make a living from it.
I merely said that if you want to try making a living from a low capital size that you should have atleast 16k to be abel to do it without too much stress or fear.
If you have more capital ofcourse that would be better, as the more money you have the less money you need to make to keep living.
But this thread was asking about whats the lowest capital you should start with,
and so i think its around 16,000gbp, providing you have experience in making a living from trading as sole income before that.
And the way i got to the figure 16k is if your a single guy between 18 t 26 living in an expensive area like London then you need about 1,500pounds per month (tax free) to get by comfortably.
(If your over 26 you would ave already had to have found a way to make a living for 8years, and so having a stream of income to support yourself shouldnt be an issue by that age)
But lets say your 23, a decent living salary that you would get in a good level office job is £21,000 per year (after tax thats about 1,500quid per month).
Trading in UK is tax free, and so lets say you need 1,500gbp profit per month.
You trade everyday thats 20days per month, so thats £75 profit per day.
You trade at a nice small size to be cautious, of just £4 per point, you need to just cover roughly 20points profit per day to cover it.
And so 20ticks per day is very very do-able, especially if you trade crude oil or dow.
This is a repeat concern over and over again for arriving noobs.
And its worth repeating that, yes, you can become successful from a very small capital base and go on to make yourself rich. It is unlikely though.
Heres why it is unlikely.
1. Not realising that daytrading is the best route. So called swing trading or infrequent trading is not going to deliver suffciently.
2. Not recognising where the money is. Its in the intraday gyrations - the sequential upswings and downswings. You buy the upmoves and sell the downmoves.
3. Not using a liquid futures market (eg ES,YM,CL). You must have a market facility that is liquid and offering a daily trading session full of points.
4. Not realizing the seriousness of the task. It requires unusal dedication. You have to clock up the knowledge and experience through endless hours of screentime.
5. Not devising or adopting a reliable and accurate methodology. This is vital. Its a requirement which seems to go beyond the reach of new players. Often it seems they are not savvy enough. They may prefer to dick around with actual trading without the needed skill
or plan in place.
6. Not thoroughly practising your methodology by paper trading or simulation. Sim trading on a good platform will illuminate the likely features of your operational failures.
7. Not having a rational and ordered mindset with a natural self discipline to apply yourself. You see so many ET members wasting their time at ET in huge distractions such as lefty or liberal leaning writings and other irrational use of their time. Money making from markets requires your full attention and application instead of time wasting on non-money making tangents and irrelevancies.
8. Not being savvy enough. You have to impose order on the prices you see and get very relaxed about using the market as conduit of money going into your pocket.
These points are not in order of importance and may overlap in your own assessment. Also they are not exhaustive.
Personally I welcome the idea of anyone becoming successful and going on to be rich through trading.
And its worth repeating that, yes, you can become successful from a very small capital base and go on to make yourself rich. It is unlikely though.
Heres why it is unlikely.
1. Not realising that daytrading is the best route. So called swing trading or infrequent trading is not going to deliver suffciently.
2. Not recognising where the money is. Its in the intraday gyrations - the sequential upswings and downswings. You buy the upmoves and sell the downmoves.
3. Not using a liquid futures market (eg ES,YM,CL). You must have a market facility that is liquid and offering a daily trading session full of points.
4. Not realizing the seriousness of the task. It requires unusal dedication. You have to clock up the knowledge and experience through endless hours of screentime.
5. Not devising or adopting a reliable and accurate methodology. This is vital. Its a requirement which seems to go beyond the reach of new players. Often it seems they are not savvy enough. They may prefer to dick around with actual trading without the needed skill
or plan in place.
6. Not thoroughly practising your methodology by paper trading or simulation. Sim trading on a good platform will illuminate the likely features of your operational failures.
7. Not having a rational and ordered mindset with a natural self discipline to apply yourself. You see so many ET members wasting their time at ET in huge distractions such as lefty or liberal leaning writings and other irrational use of their time. Money making from markets requires your full attention and application instead of time wasting on non-money making tangents and irrelevancies.
8. Not being savvy enough. You have to impose order on the prices you see and get very relaxed about using the market as conduit of money going into your pocket.
These points are not in order of importance and may overlap in your own assessment. Also they are not exhaustive.
Personally I welcome the idea of anyone becoming successful and going on to be rich through trading.
Quote from spindr0:
You can hold 4x intraday as long as you meet the $25,000 account value. Obviously, more than 25k is necessary to cover intraday fluctuations. But the salient point if you haven't grasped it is that you can turn that money over as many times as you want intraday. If you have grasped it, my apologies for wasting my time
Not sure it's been discussed, but a major point to remember with 4x buying power is that it's computed at the start of the trading day based on the excess margin in your account as of the close of the previous session.
So, if you have a $50K account and carry a $25K overnight hold on a stock you're not going to have the full $200K buying power for that trading day, even after you close out the overnight hold.
Worse, brokers are free to draft more stringent rules than what is laid out in 2520.