Starting to trade - $5000 enough?

Hi,

I would like to play around in the markets, specifically day trading (I realize there is a Pattern Day Trader rule, so I would keepit to 5 trades a week or w/e the actual rule is before being slapped with this tag and having to have $25k min)

Is it possible to learn the markets with as little $5000? I mean, is it even possible to open an account somewhere with $5000? I've read various stories of people turning a few thousand into millions (Tim Sykes, for one). I'm not looking for that, and even if I go broke(I'd assume highly likely) I would look at it as educational expenses.

I just don't know where to start, what companies will allow me to trade with just $5000?

Will companies allow me to open a margin account with $5000? is there anyway to get any kind of extra leverage with such a small amount of money?

The rule is 3 day trades in a rolling 5 day period. Yeah you can open an account with 5000$ If your looking for leverage look to forex or futures.

mray said:

Hi,

I would like to play around in the markets, specifically day trading (I realize there is a Pattern Day Trader rule, so I would keepit to 5 trades a week or w/e the actual rule is before being slapped with this tag and having to have $25k min)

Is it possible to learn the markets with as little $5000? I mean, is it even possible to open an account somewhere with $5000? I've read various stories of people turning a few thousand into millions (Tim Sykes, for one). I'm not looking for that, and even if I go broke(I'd assume highly likely) I would look at it as educational expenses.

I just don't know where to start, what companies will allow me to trade with just $5000?

Will companies allow me to open a margin account with $5000? is there anyway to get any kind of extra leverage with such a small amount of money?

Click to expand...

I know that American citizens have legal problems with spreadbetting, but don't know about Canadians. However, if you are inexperienced, $5000 is not a lot of money because, if you are Mr Average, you are going to get it wrong and the losses through a broker can be fierce. It is not the margin that will lose you money, but the stake size. The stake size with a spreadbetting company can be as low as 50 pence per point.

Many compare these companies with the old bucket shops. I can, in all honesty, say that that has not been the case with me. The European indices can have a 2 points spread. which is a lot, but I made 80 points on Euro/GBP (3 points) in three hours, last Tuesday, without problems.

This is just an observation by someone who has used a broker and was not too impressed, with minimum trades (then) of ten euros per point, there is not much room for error.

Anyway. as I said, these are just observations which may help.

Split

mray said:

Hi,

I would like to play around in the markets, specifically day trading (I realize there is a Pattern Day Trader rule, so I would keepit to 5 trades a week or w/e the actual rule is before being slapped with this tag and having to have $25k min)

Is it possible to learn the markets with as little $5000? I mean, is it even possible to open an account somewhere with $5000? I've read various stories of people turning a few thousand into millions (Tim Sykes, for one). I'm not looking for that, and even if I go broke(I'd assume highly likely) I would look at it as educational expenses.

I just don't know where to start, what companies will allow me to trade with just $5000?

Will companies allow me to open a margin account with $5000? is there anyway to get any kind of extra leverage with such a small amount of money?

Click to expand...

The pattern day trader rule does not include futures, have you looked into trading e-minis? Would this not be better to daytrade?

$5000 is plenty to learn but not enough to make money. Even if you manage to make 100% a year after expenses you will be working full time for just $5000.

Furthermore, nobody will pay attention to a trading record based on such a low amount. But it's a good amount to start with and learn the basics, especially in forex markets.

ronblack said:

$5000 is plenty to learn but not enough to make money. Even if you manage to make 100% a year after expenses you will be working full time for just $5000.

Furthermore, nobody will pay attention to a trading record based on such a low amount. But it's a good amount to start with and learn the basics, especially in forex markets.

Click to expand...

Boo! Moneybags! :clap:

Personally, I was happy to learn with a lot less.

It doesn't matter how little you start with, if you know how to do it, it soon mounts up :whistling

I'd say that the least attention that is paid to you, the better off you are, too.

I love you people, I, really do. So full of hope and optimism. That's the way to be. Keeps me feeling young.

Split

ronblack said:

$5000 is plenty to learn but not enough to make money. Even if you manage to make 100% a year after expenses you will be working full time for just $5000.

Furthermore, nobody will pay attention to a trading record based on such a low amount. But it's a good amount to start with and learn the basics, especially in forex markets.

Click to expand...

I've read of a lot of people starting with small somes and working it up. I mean, if (and it's a big IF) I end up being profitable, my account will grow and grow and eventually it will be decent money. If you get 100% return on your 5k in one year, I would imagine the sky is the limit at this point.

Also, not sure what you mean by noone will pay attention to my trading record? Do I want people tolook at my trading record ? (just not sure what you mean by this)

I did not start with more than the amount necessary to open my account, but that was when online trading started. I had to add to that but the amount I have put into spreadbetting, before things started to improve, did not reach $1000. On the other hand, my broker account cost me thousands because of the fact that I was trading in contracts. Spreads are tighter with a broker, but I found that that did not compensate when I was learning.

I admit that I started trading in middle age and did not need the money, otherwise I might have put more in. Neither am I after great wealth from trading.

Dedicated trading is terribly hard going and can be a worry, too. I don't need that.

Good luck to you.

Split

Well, my first accout was six hundred dollars. I'm glad I didn't put more into than that because I would have lost more. I don't see why you even need to start with as much as five. I don't mean to sound negative, but you have an eight percent chance of not losing your money. Why not just start with a thousand and see how long you can hold on to it? If you're just starting you should be buying small amounts of shares and try not to lose on each trade. This way you can learn and it won't cost you so much tuition. There are tons of brokers that will open an account for you with a small deposit. Tradeking is one. Zecco. Etrade, although beward Etrade's comissions. You're best bet is probably tradeking.

Personally, my second account I opened with a thousand two hundred dollars, and some months later, I'm happy to say I still have a thousand two hudred dollars in it.

I would also recommend staying away from leverage for the time being. A great trader advised me to leverage success, not failure. That made a lot of sense to me.

fantastic4 said:

I don't mean to sound negative, but you have an eight percent chance of not losing your money.

Click to expand...

How did you calculate this figure?