How much money do I NEED to start?

This is a discussion on How much money do I NEED to start? within the First Steps forums, part of the Reception category; I am also new to this game but i found a website reallifetrading which has great video classes and has ...

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Old Dec 12, 2016, 2:33pm   #9
 
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I am also new to this game but i found a website reallifetrading which has great video classes and has a swing trading section (what i have been looking at) and also a DAY TRADING section. They are both totally FREE. The guy on there Jeremy talks (and has written a book) about starting day trading with only $2500. I think this is a realistic figure when opening a leveraged account. I have learnt so far that your risk on any one trade should not be greater then 2% of your total account. therefore if you start on a $200 account your risks and rewards in dollar terms would be very small and not worth the commissions. This website is worth checking out before you begin trading to help you make a trading plan and impliment safe risk management strategies. By the way i have no connection to this company it is just that they have taught me a lot so far and i think would help to answer many of your questions.
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Old Dec 12, 2016, 6:55pm   #10
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i started with a $10K and risk only 2% per trade
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Old Dec 12, 2016, 9:33pm   #11
 
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Originally Posted by NVP View Post
interesting why $10,000 ? ...whats wrong with micro accounts ?

N
I'm an enthusiast of micro accounts. To be successful with them my belief is that you have to be very careful, very risk conscious and very patient – funnily enough these are qualities that have served me well for quite a few years now. If you can successfully develop these qualities with a micro account it can be a very cheap way of learning. However, in my experience it's nowhere near as easy as you might think. If you are a novice, before you even think about doing it for real my recommendation would be to do it on a demo account just to try out your methodology – once you've got that straight you can go on to the real thing and then ascertain the size and resilience of your gonads. You don't even have to open a demo account – make your own demo account with a spreadsheet and just get prices from your broker or one of the many trading websites. One of the problems I found with demo websites is a restricted range of instruments unless of course you're doing FX. Could it be that brokers would prefer beginners to start on FX?

As an experiment, 6 months ago I started a micro spread bet account (US S&P 500 shares ) with £1000, to see what I could do. I've now just about doubled it and managed to keep drawdown no greater than 16%. So, a grand in 6 months – doesn't seem to be the way to untold riches and the easy life: you could get more than that stacking shelves in the local supermarket! But what did I learn? Well actually, nothing new. Just all the old lessons that have been around for ages and are available free. E.g. Keep an eye on risk at all times; don't let losers run away i.e. cut losses – very easy in theory but very difficult to do for real; don't rush – think about everything and study your charts carefully; one or 2 basic old-fashioned indicators can be helpful but it's no good following them blindly; with such a small account it's important to grab profits when they're there – wait too long and they disappear in a puff of smoke and counter-trend . Running your profits (for too long) can be an expensive mantra to follow in my experience. Keep an eye on the market index and get a feel for any rhythms which may develop.

These trades usually lasted from 1 to several or more days – perhaps up to 14 when on occasion, I didn't have the sense to get out earlier. So maybe not a lot of use to the short-term or FX trader I'm presuming. I don't do FX, it all seems a bit too fast and risky to me - but who am I to say? The last 6 months has reinforced all the old lessons which are so easy to forget; made me remember that thinking and patience are very important; reminded me that it's the trade that is important and not the potential riches and down payment on a yacht. The common advice is to expect to blow up one or more accounts during your apprenticeship – very easy to do I have no doubt, but if you tread carefully and start off on the beginners slopes (others can say whether that should include FX) I don't believe that necessarily has to be so. Minimum leverage as part of your risk-controlled financial diet goes a long way to keeping you healthy and in the game.

But do NB: all this is a waste of time if you basically haven't got an edge – you'll just die gradually instead of a merciful quick demise. So make sure your demo trading does demonstrate an edge and keep at it until you know you've got one – if you're not sure that you have one, then you haven't got one.
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Old Dec 13, 2016, 10:10am   #12
 
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^^good post-how long have you been trading?
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Old Dec 13, 2016, 10:23am   #13
 
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Originally Posted by Chalky_trader View Post
Id say it was the clever & prepared person that traded with a very small amount of money
I think that a lot of experienced traders who have been around the block will NOW trade small having learnt from past lessons.Years ago when just starting i traded with a 20k account when spreadbetting.I had decent risk management but didnt know sh--t really(still dont).i had a few bad moves and gaps whilst spreadbetting and it taught me a lot.I managed to make money but in the end i would say that i was lucky to do so.i walked away and have tested stuff again but i always seem to just grind and either make a little or break even(not worth the stress)If i was serious about it again i would put maybe a grand into an account and just top it up or withdraw.just trade for the fun of it. hybury fx stated that some people can make good money but usually give it back(i think he said that
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long YM 808 SIM TRADE

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Old Dec 13, 2016, 11:28am   #14
 
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Originally Posted by sminicooper View Post
I'm an enthusiast of micro accounts. To be successful with them my belief is that you have to be very careful, very risk conscious and very patient – funnily enough these are qualities that have served me well for quite a few years now. If you can successfully develop these qualities with a micro account it can be a very cheap way of learning. However, in my experience it's nowhere near as easy as you might think. If you are a novice, before you even think about doing it for real my recommendation would be to do it on a demo account just to try out your methodology – once you've got that straight you can go on to the real thing and then ascertain the size and resilience of your gonads. You don't even have to open a demo account – make your own demo account with a spreadsheet and just get prices from your broker or one of the many trading websites. One of the problems I found with demo websites is a restricted range of instruments unless of course you're doing FX. Could it be that brokers would prefer beginners to start on FX?

As an experiment, 6 months ago I started a micro spread bet account (US S&P 500 shares ) with £1000, to see what I could do. I've now just about doubled it and managed to keep drawdown no greater than 16%. So, a grand in 6 months – doesn't seem to be the way to untold riches and the easy life: you could get more than that stacking shelves in the local supermarket! But what did I learn? Well actually, nothing new. Just all the old lessons that have been around for ages and are available free. E.g. Keep an eye on risk at all times; don't let losers run away i.e. cut losses – very easy in theory but very difficult to do for real; don't rush – think about everything and study your charts carefully; one or 2 basic old-fashioned indicators can be helpful but it's no good following them blindly; with such a small account it's important to grab profits when they're there – wait too long and they disappear in a puff of smoke and counter-trend . Running your profits (for too long) can be an expensive mantra to follow in my experience. Keep an eye on the market index and get a feel for any rhythms which may develop.

These trades usually lasted from 1 to several or more days – perhaps up to 14 when on occasion, I didn't have the sense to get out earlier. So maybe not a lot of use to the short-term or FX trader I'm presuming. I don't do FX, it all seems a bit too fast and risky to me - but who am I to say? The last 6 months has reinforced all the old lessons which are so easy to forget; made me remember that thinking and patience are very important; reminded me that it's the trade that is important and not the potential riches and down payment on a yacht. The common advice is to expect to blow up one or more accounts during your apprenticeship – very easy to do I have no doubt, but if you tread carefully and start off on the beginners slopes (others can say whether that should include FX) I don't believe that necessarily has to be so. Minimum leverage as part of your risk-controlled financial diet goes a long way to keeping you healthy and in the game.

But do NB: all this is a waste of time if you basically haven't got an edge – you'll just die gradually instead of a merciful quick demise. So make sure your demo trading does demonstrate an edge and keep at it until you know you've got one – if you're not sure that you have one, then you haven't got one.
That is a VERY good post imho. As stated in NB above, to trade with any degree of success, you need an edge of some sorts (can be absolutely anything), to develop an edge needs experience and staying alive with small accounts and gradually building that experience is the keys to the kingdom if you have the staying power.
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Old Dec 13, 2016, 12:16pm   #15
 
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Originally Posted by itspossible View Post
^^good post-how long have you been trading?
Quite a few years now – certainly before the inception of T2W. So even though I would class myself as experienced, I'm still learning and it is a big mistake to automatically equate experience with expertise. Remembering what it was like as a beginner – knowing nothing then and nowadays being at the mercy of the wallet-emptying get-rich-quick brigade, I just wanted to give hope to beginners and help them to realise that although it isn't straightforward you can succeed if you apply yourself sufficiently.

There are a couple of other things I would recommend to beginners. Firstly, get your life-philosophy clear in your mind: what do you want from trading? Why are you trading? Do you eventually intend to go full-time or is this just a dalliance to brighten up an otherwise dull life? These are the sort of things you need to think about and get very straight in your mind. As an example, I'm just fascinated by trading and always looking to accomplish the perfect trade – much in the same way as a sportsman is always looking to perfect his art. So for me, even though I like the money as much as the next person it's not the be all and end all – in fact I treat my trading account a bit like a private cashpoint machine and it enables me to indulge in luxuries that I otherwise might feel rather guilty about. Now if I were a part-time trader with a dependent family I would probably have to rethink all that.

The 2nd thing I would commend to the beginner is to become proficient in spreadsheets – if you think about it, accountants are pretty good with spreadsheets: do you know of any accountants on the breadline? As far as I'm concerned, being a trader and not proficient in spreadsheets is like trying to run a marathon in your wellies! I'm pretty fortunate in being able to understand many things computing but if you can do schoolboy arithmetic you can certainly learn the basics of spreadsheets and formulae. There are loads of free tutorials on the web and once you start to exploit the possibilities of spreadsheets I promise that you will never look back. How you proceed to use your spreadsheets is another entire subject and will become a project in itself if you take it seriously.

I think it must be pretty daunting at the outset for most beginners. Many vendors tell you that it's just a question of doing a bit of study and/or attending the course, religiously following a set of rules, (& most importantly don't forget to hand over the dosh that you could otherwise use in a trading account) and "Bob's your uncle". Unless you are lucky – and there are some good trainers out there – it won't be like that. It's a long hard slog with loads of setbacks and it will test your determination and perseverance to the limit.
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Old Dec 13, 2016, 2:09pm   #16
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Originally Posted by NVP View Post
interesting why $10,000 ? ...whats wrong with micro accounts ?

N
I think small amounts are good to take a start however if we need to earn more we might require more investments however i am good with earning small but consistent returns on my investments.
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