Popular daytrading account size

volente_00 · May 23, 2020

hafez50 said:
I've trained or known 100's of traders over 31 yrs and every single one me included had huge almost career ending loses going short at one time or another . Seriously no novice trader should ever go short and most seasoned traders should not be shorting more than 10-20% of their trades short . Imho on what i've seen over 3 decades .

Funny you mention this. The only time in 21 years i got a margin call was from shorting JNPR before earnings.

Evermore2017 · May 23, 2020

SimpleMeLike said:
Evermore2017,

Take the $100K and subtract $98K from it. This leaves you with $2K. Put the $98K in savings.

Use the $2K to trade stocks. Risk 1% or $20 per trade.

Do this until your account balance is $5K.

After that you will know for certain, if you ready to risk $100K stock trading.

I grew my account from 3K to 30K, but I believe is not enough

Renzo · May 23, 2020

I’m going to go against the grain of all these wise people and say you need $500 to start. Will it be restrictive? Yes. But I’m betting you won’t feel too bad about losing $500. You’ll learn money management. You’ll learn that you can blow up any amount with one bad play because math doesn’t care.

you’ll learn that if you can grow that from $500 to $25k, in a consistent way, you’re good to begin day trading.

virtusa · May 23, 2020

I was never interested in what is popular, so neither in the popular size.
The optimal size for my trading is all I am interested in.

virtusa · May 23, 2020

Renzo said:
I’m going to go against the grain of all these wise people and say you need $500 to start. Will it be restrictive? Yes. But I’m betting you won’t feel too bad about losing $500. You’ll learn money management. You’ll learn that you can blow up any amount with one bad play because math doesn’t care.

you’ll learn that if you can grow that from $500 to $25k, in a consistent way, you’re good to begin day trading.

Indeed. You can dream big, but you should always start small.

Evermore2017 · May 23, 2020

virtusa said:
I was never interested in what is popular, so neither in the popular size.
The optimal size for my trading is all I am interested in.

What is the "optimal size"?

Sekiyo · May 23, 2020

Evermore2017 said:
What is the "optimal size"?

Optimal size depends on your strategy.
If you can’t bet more than 1% to avoid ruin,
Then you need your account size to handle this.

If you’re half funded betting 2%
Then you’re screwed in the long run.
You will eventually hit the uncle point (Ruin).

There is no magic numbers.
There is an optimal betting size.
But optimization is context dependent.
It requires at least approximate parameters.

Sekiyo · May 23, 2020

Sekiyo said:
Optimal size depends on your strategy.
If you can’t bet more than 1% to avoid ruin,
Then you need your account size to handle this.

If you’re half funded betting 2%
Then you’re screwed in the long run.
You will eventually hit the uncle point (Ruin).

There is no magic numbers.
There is an optimal betting size.
But optimization is context dependent.
It requires at least approximate parameters.

If you bet on a loaded coin,
Win 100$ at 60% vs Lose 100$ at 40%,
Then you need minimum a 1000$ bankroll to play.

Otherwise you will very likely end up ruined.
Even though you have a favorable situation.

Evermore2017 · May 23, 2020

Sekiyo said:
Optimal size depends on your strategy.
If you can’t bet more than 1% to avoid ruin,
Then you need your account size to handle this.

If you’re half funded betting 2%
Then you’re screwed in the long run.
You will eventually hit the uncle point (Ruin).

There is no magic numbers.
There is an optimal betting size.
But optimization is context dependent.
It requires at least approximate parameters.

And what is the relation between the risk level 1%(ideal) and the trade size? Some traders made $65K(o more) trades (500 shares/$130 stock) with a $50K account to scalp $100. Using the 4X Day trading buying power.

Risking that huge amount to only scalp $100?

BAT31 · May 23, 2020

Evermore2017 said:
And what is the relation between the risk level 1%(ideal) and the trade size? Some traders made $65K(o more) trades (500 shares/$130 stock) with a $50K account to scalp $100. Using the 4X Day trading buying power.

Risking that huge amount to only scalp $100?

$100 - commissions - ordinary income tax rate.