Day Trading Basics – How Much Is Needed To Start A Trading Account?

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Day Trading Basics – How Much Is Needed To Start A Trading Account?
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Again the topic of this video is day trading basics. Therefore anyone with more experience can skip this altogether. In the last video we talked about how much money was required to start trading and we left off at how much we actually need to deposit in our trading account. I specifically left this off because there are quite a few factors that affect just how much will be required for your trading account.

So, let’s begin first with asking yourself a few questions. Once you know the answers to these questions you’ll have a better idea of how to determine just how much exactly you’ll need and you’ll understand day trading basics.

The first few questions are:

Are you going to begin doing this full time? or

Will you still have another job while you learn how to do this?

These questions are pretty important because the answer will determine how aggressive you can be with your money management.

If you are planning to do this full time then you’re going to need enough to have six months of reserves and a healthy amount per contract which we will discuss below. So, overall you’re going to fall on the very conservative end of the spectrum and the reason being is that you are giving yourself a shot and if it doesn’t work out you’re going to need to find another way o producing income for yourself.

You can even take this a step further and be even more conservative by considering if you are still young and whether or not you’re just supporting yourself or an entire family. If the answers to both of those are yet then you will need even more money to set aside.
If you have another job well then you can be more aggressive because you can afford to reload your account if you manage to lose some money.

The second thing that you’ll need to ask yourself is what kind of personality do you have? Are you more on the aggressive side or conservative side.

If the answer is more aggressive then you can probably get away with as little as $2.5k per contract. If however you have a more conservative type of personality then you’ll want to go for a safe $5k per contract. Again these are estimates as I have students that started with as little as $2.5k. Hope you enjoyed this episode teaching you day trading basics.