How Much Money Does a Trader Need To Start Trading?

This is a discussion on How Much Money Does a Trader Need To Start Trading? within the New to Trade2Win forums, part of the Reception category; Hi Willem, Originally Posted by Willem30m . . . Lately, I only trade stocks on Euronext, using a buy and ...

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Old Dec 27, 2010, 2:20pm   #33
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re: How Much Money Does a Trader Need To Start Trading?

Hi Willem,
Quote:
Originally Posted by Willem30m View Post
. . . Lately, I only trade stocks on Euronext, using a buy and hold strategy for stocks that pay out the most dividends. Because of a new job earlier this year, I don't have the time to follow the markets closely anymore when they are open. The thing about Stocks though, especically the ones with high dividend, show quite a slow price movement. So that's how I came up with the 10%.
As a rule of thumb, companies that pay a decent dividend tend to be large and profitable - 'blue chips'. They tend not to be young companaies growing fast and, consequently, they offer the dividends to attract investors. Their share price tends not to be especially volatile which is attractive to LTBH investors - but not so to traders.

Quote:
Originally Posted by Willem30m View Post
I understand that for futures, there is alot of risk involved, but the returns are also higher.
All this means is that futures are more highly leveraged than equities. Yes, potentially, you can make more - and quicker - but, just as easily - you can lose more - and quicker! However, this potential for exposure to added risk isn't a problem if you know how to manage it. To decide to trade futures in preference to equities because of the potential of greater returns would be a big mistake, IMO.

Quote:
Originally Posted by Willem30m View Post
One of the first chapters describes that according to pro future traders, you need about 100K to make it in that market. That is alot, but not impossible for me to achieve somewhere in the next couple of years. It also states that in the futures market, 95% of all traders lose money, in which undercapitalization seems to play a big part as well.
Publishers of trading books have to be aware of the potential of moral hazard. If they said anyone can open a futures trading account with $5k and compound it into a fortune in nano seconds - they'd soon find themselves in very hot water. Consequently, they over compensate. The flip side of the arguement is this: if you're a poor trader who's about to blow their account trading futures, is it 'better' to blow a $5k account or a $100k one? As for the infamous 95% statistic - it's another example of something people get very animated about for no obvious reason. Obviously it's difficult, otherwise everyone would do it. Coupled with this is a most unusual barrier for entry into the market: you must be 18. That's it! Put the two together and it's easy to see that the failure rate is gonna be high.

Quote:
Originally Posted by Willem30m View Post
Can I ask you Timsk how much capital you use for futures trading and what your returns are in that market? I would just like to hear from people who are actually trading these markets to get an idea.
The point I've been trying to make in previous posts is that the results of any one individual trader are completely irrelevant and meaningless to you. There are no reliable yard sticks. For me (or anyone else) to supply my own trading stat's will be more of a hindrance than a help to you. If I posted good figures you'll be inclined to be encouraged and visa versa. The only stat's that matter are YOUR stat's based on YOUR trading results.

Tim.
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Old Feb 8, 2011, 1:33am   #34
 
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re: How Much Money Does a Trader Need To Start Trading?

One can make a lot of money by just not over trading. Opportunities in the market (high probability trades, provided you are not a day trader) only come once or twice a month for a given stock or instrument..

From experience I have seen good technical traders doing average results with over trading and average traders producing enormous returns just by taking high probability setups once a week..
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Old Oct 7, 2012, 4:27pm   #35
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Re: How Much Money Does a Trader Need To Start Trading?

I trade futures and most professional clearers that don't deal with retail won't let you open account less than 50k
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Old Oct 7, 2012, 10:06pm   #36
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you don't need so much, but you should have enough so you can effectivly trade using Money management, if you trade micros you dont need more than a few hundred, for minis (Forex) you need atleast 1000, this is if you are going to be trading with about 2% or your acount.
something like that.

If you like to trade Futures then you need a lot more, this have to do with the lotsizes are generally much larger trading futures, a minilot future is much larger than a minilot forex, so the amount of security you will have to put up to trade is also larger

Last edited by timsk; Dec 14, 2012 at 5:07pm.
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Old Oct 7, 2012, 10:19pm   #37
 
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Re: How Much Money Does a Trader Need To Start Trading?

..it also depends on what you want to do with the account (live off of it, only for growth), your experience level, and how much money you have total.
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Old Oct 8, 2012, 7:58am   #38
 
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Re: How Much Money Does a Trader Need To Start Trading?

I've always assumed a good 25K US would be sufficient. Also, I'm sure it depends on the market one is trading.. So far most account with 25K, you're able to have access to Margin as well.
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Old Oct 8, 2012, 9:22am   #39
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Re: How Much Money Does a Trader Need To Start Trading?

its horses for courses ...........just make sure you have sufficient funds available to manage your risk multiple required per trade .

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Old Oct 9, 2012, 5:41am   #40
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Re: How Much Money Does a Trader Need To Start Trading?

Quote:
Originally Posted by Willem30m View Post
Hi Timsk and upacs. Thank you for taking the time to replying, I really appreciate it.

I want you to know I've read your posts and it has inspired me to learn something more about the futures market, which I don't know much about yet. In the past I have traded several markets like stocks, options, forex and leveraged products with stock as the underlying vehicle, but I never tried or read anything about futures. Lately, I only trade stocks on Euronext, using a buy and hold strategy for stocks that pay out the most dividends. Because of a new job earlier this year, I don't have the time to follow the markets closely anymore when they are open. The thing about Stocks though, especically the ones with high dividend, show quite a slow price movement. So that's how I came up with the 10%.

I understand that for futures, there is alot of risk involved, but the returns are also higher. I am just going to read trough this book first and see what's what. I've picked up a copy of Trading Futures for Dummies, which is pretty interesting so far.

One of the first chapters describes that according to pro future traders, you need about 100K to make it in that market. That is alot, but not impossible for me to achieve somewhere in the next couple of years. It also states that in the futures market, 95% of all traders lose money, in which undercapitalization seems to play a big part as well.

Can I ask you Timsk how much capital you use for futures trading and what your returns are in that market? I would just like to hear from people who are actually trading these markets to get an idea.
the amount depends on what you will buy/sell )))
if you would like to trade with Berkshire Hathaway shares i think you have to start with 20K if there will be leverage available
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