How much money is needed to trade for a living?

[CavaliereVerde]

Survey

 

[MasterOfCoin]

Survey

..
Surely that depends on how good you are at it?, no?

Assuming one has at least some money to play with, the answer largely depends on what standard of living you are prepared and consider acceptable to be content with.

And that is a very elastic and subjective measure indeed.

🤔

 

[MasterOfCoin]

As I've nothing better to do for a few moments, I'll flesh out some modest figures.

For those content to live modestly on say a thousand pounds per month:

One can reasonably expect to make 8-12% on Grade B Investments (low to medium risk),
And around 50-80% overall gains on actively traded higher volume 'safe' stocks in a volatile market.

Split that 50/50 and without even considering leveraged higher risk gambling activities, you get;
(using the lower ends of expectations)
£75,000= Invested @8% returns for half.
£12,000= Traded @50% gains for other half.

Which gives an answer of around £87,000 Capital required to achieve the desired income threshold.

That's in the mid-range of the polled figures and well within the reach of a reasonably good trader/ investor with a bit of a nest egg to get actually earning some proper money instead of languishing in any old banks piss poor investment offering where the bank makes shedloads of dosh and pays out a few measly crumbs to the suckers funding it.

Just throwing some actual 'back-of-fag-packet' figures out there to add some grist to the topic,
... maybe generate some more replies to the thread.

🙂

 

[0FXTrader0]

Now the leverage has been reduced in UK for retail to 30/1 its not as easy. But still doable if you trade intraday and manage risk correctly, do not need a lot of capital. All you need to do is compound a proportion of gains.

 

[StanHansen]

It really depends on the country you're living in and your family status. I'm currently single so $50 000 per year is quite good for me.

 

[amtradingfx]

Calculate how much your monthly expenditure multiply by minimum 6 months at least maybe even 12 have that put away so it’s 3k so 36k put away so you can survive if trading isn’t going well

using the 3k example
then 3k per month making around 2% consistently trading per month would need a 150k account

 

[HeavLeighGill]

Depends on how much money you’re trying to bring in monthly/yearly along with your strategy and other factors. I’d say at least 30k if you were going to solely live off of trading income.

 

[tomorton]

How much money you need to live on is a subjective quantity. £25000 a year might be enough for one person but another person might need £40000.

Comparison with the incomes of the rest of the population is at least objective. At the IFS website if you enter your household income after deducting Income Tax, National Insurance and Council Tax you will be able to see how your income compares with other households of equivalent size in the UK. It might be a reasonable objective to aim for an income which is at least as good as what 50% of comparable households are getting.

 

[ridgeback]

Depends like you say but if you are trading you're own book I think your numbers are spot on (in the UK), £70k seemed to be a watermark for me to make £3k per month. Very, very doable to get funded if you are good.

 

[Farm Yard Forex]

Depends on where you live in the world, cost of living, standard of living, trading ability, type of trading being applied. There is no arbitrary number to answer this.

 

[Eyon_MUS]

After reading all the comments above, here is the universal formula for everyone to fit into their own variables.

Σ = 12 x E / %

whereby

Σ - the sum of $ to retire or trade comfortably
E - your monthly Expenses
% - your annual profit in % (must be somewhat consistent)

Case study. - How much $ do I need to retire with 10% annual growth if my monthly expenses is $3k.

Σ = ?
Monthly expenses = $3k
% = let 's say 10% (just buy index SPX if you cant beat 10% annually). 10% = 0.10

Σ = 12 x $3,000 / 10%
Σ = $36,000 / 0.1
Σ = $360, 000

$360,000 is the amount you need before you even think about retirement.

Adjust your own E and % to get a more accurate figure for yourself. Hope this help to shed some light.

 

[Jungletrader]

Depends on your outlays cost of rent/ mortgages.
Expenses household costs etc
Whatever your spending habits don't rely solely in trading is my advice

 

[WalletInvestor]

Some great answers on this thread about how to determine the ballpark number.
Ultimately, if you are planning to live off trading, you should calculate based on your monthly expenses and your own trading results.