How Much Money Do You Want to Begin?
The answer to this question Depends on the market you wish to trade. With a systematic approach, we’ll determine the best marketplace for you over the course of the next few chapters, but the informa-
Tion below will provide you a basic Idea of your choices:
1.) If you wish to day trade stocks, then you need at least $25,000 on your trading account.
2.) If you want to day trade futures, then you should have between $5,000 and $10,000 on your trading account.
3.) When trading options, you need to have between $1,000 and $5,000 on your trading account.
4.) If you are thinking about trading currency, then you can start with as little as $500 on your trading account.
Financial concerns are always important, but do not make the Com-mon error of letting your present financial situation dictate which market you are going to trade.
If you do not have sufficient funds to trade the markets you have outlined In your objectives, then begin doing something about it now — save money or put in overtime hours. There are a whole lot of strategies to create a few more bucks, and it is far better to await the money you need than to start trading in a marketplace that isn’t best for you and your targets.
For People who have the right amount of money on your Savings account, let us discuss the question, “How much cash SHOULD you exchange? ”
Many first-time traders believe they should trade all their savings. This isn’t correct! To ascertain how much money you should exchange, you must first ascertain how much you can actually afford to lose, and what your financial goals are.
Let us start by deciding how much of your savings must remain in your savings account. It is important to keep three to six months of living expenses at a easily accessible savings accounts, so set that money aside, and do not trade it! You shouldn’t trade money which you might need immediately. If you don’t have funds from another source, including a re-cent inheritance, the residual amount of cash will most likely be what you currently need to exchange with.
Take a close look at just how much money you can afford to trade. You Don’t want different parts of your life to endure when you tie your money up in a trade, so be certain you think about what these savings were initially for.
Then determine how much you can add to your trading activities from the future. If you’re currently employed, you may continue to receive an income, and you may plan to use a part of that income to build your investment portfolio over time.
Two more important things to remember:
1.) As outlined above, certain types of investments require an initial deposit amount to begin. This does not mean you will be risking the entire amount. Many traders are just willing to risk 10% of the initial deposit.
2.) Never Borrow money to exchange, rather than use money which can not afford to lose!