You would be better served starting with 5k and limiting your loss to 500 rather than starting small and struggling to get up. The old adage, money makes money springs to mind. It's always easier with a larger safety net behind you and just because you have more money in the acct doesn't mean you have to take larger positions. Try to find a balanced broker who will allow you to deal in 50p's / point whilst you spend valuable screen time learning the ropes. Under capitalisation and cash flow are the primary reasons why businesses fail, be realistic, you will be running a business. Good luck.
Is it as straightforward as that?! I'm still very much a novice.
No of course not. You will need to spend a considerable amount of time learning all you can about how things work.
On a practical level, try to identify One single chart pattern and record faithfully all the levels in play and all the various outcomes as the charts unfold going forwards. Build up statistical info so that you begin to understand probability of outcome. You can do this on historic charts walking forward as part of the homework. The pattern I would suggest for contrarian trading would be bullish engulfing or bearish engulfing. For trend trading first of all, everyone has a different definition of trend, so you must find a description you are comfortable with. Then record outcomes from there.
It's all a bit vague this, but for sure, if your serious about trading, then you must "do the work"/ By doing the work you will gain in understanding.
I agree completely that it is best if you can start with at least $3k-$5k at a minimum. Even at that starting base, often a "loss" can easily eat up 5% to 10% of your account equity at a time. That's why a larger start base is important.
Another important point to your post - trading does NOT lead to an easier future/retirement!
I know of many part-time traders that are able to generate some profitability. However they are NOT able to generate wealth for themselves! They "consume" their profits to exchange for "lifestyle" items/goals.
Traders who do NOT have the PASSION and VALUE to buy assets that appreciate and/or generate passive income - will NOT achieve an easier future/retirement.
I would suggest that you learn more on the topics of wealth-building vs self worth from a psychological perspective.
In our trading circles, we can easily see which traders will make it or not! A low net worth is a symptom/metric of low self worth.
So - before you jump into trading, make certain you are well grounded:
1. Understand your Values, Beliefs, Primary Reason(s) on why you want to trade.
2. Begin to explore the trading assets, styles, time frames, tools, etc., that can best fit your personality, your available time to spend on trading, etc.
3. Explore the critical differences & tools to help you focus on true wealth building (vs just trading for profits sake).
Data indicates > 75% of lottery winners, trust fund inheritors, etc., return to being "broke" or worse within 2-5 yrs after receiving sudden large sums of $$$.
I cannot emphasize enough for you (and all T2W newbies and traders) - you will NOT achieve wealth and/or freedom - until/unless you can learn to really love and value to save (pay self first) and purchase assets >> instead of spending on consumer lifestyle items!
Fortunately - you've landed at T2W - so there will be many threads, posts, that can help you jump start your trading scenarios!
You're right to be concerned about leverage. It's a dangerous feature of trading which many newbies fail to treat with the respect it deserves. That can prove to be a very costly! To trade without using any leverage is likely to require a much larger account - as c_v recommends. Your best bet is to focus on markets and instruments that don't necessitate large leverage multiples - equities being the most obvious example. At the other end of the spectrum, you have Forex. This requires massive amounts of leverage in order to take advantage of relatively small price movements.
If the USD$ moves a quarter of one cent in a day - that's a big move. Without leverage, your £500 will buy you about $850.00. So, if you risked your entire account and the dollar moved in your favour by $0.025, then you'll make a profit of $21.25 or circa £12.60. The slight downside here is that most traders recommend risking no more than 2% of your account on any one trade - and many maintain this is too high. This would reduce your profit to the region of £0.25p or there about. If you're a day trader and make 4 trades a day, you're going to make a grand total of £5.00 per week for your efforts. This assumes a full quarter cent move on the USD$ every day and no losing trades at all on your part! Take out commissions or spreads, poor fills and slippage etc, - and you're going to be left with a lot less!
I'm sure c_v or others will correct me if I've got my maths wrong but, hopefully, the illustration shows you why leverage exists and why many retail traders with relatively small accounts couldn't trade without it.