How Much Money Do You Need to Day Trade for a Living?

How Much Money Do You Need to Day Trade?

At least three times a week I’m getting the question, “How much money do you need to day trade?” And often people who ask me this are coming from a standpoint of: I don’t have much money right now, but I want to make some money.

So that’s what we’re going to talk about today, how much money do you need to day trade?

The Question: How much money do you need to day trade?

Just a few days ago I received a question from Kim. Kim is not very happy right now. So, Kim said, “I don’t have much money right now. I’m in a financially difficult position, but I want to make money with trading.”

I said, “Okay, how much money do you have right now?”  And she said…

“Right now I have $100 and you know what? My goal is to trade for a living. So my idea is to make a lot of money be happy and hopefully make, I don’t know, maybe a $1,000,000. And so the question is, is this possible?”

And as you can imagine the answer is NO. This does not work.

You Need Money to Make Money

You need money to make money and let’s talk about it. How much money you really need to get started with trading? How much money do you need to day trade.

How much money do you need?

how much money do you need to day trade

Based on my experience, the minimum amount of money that you need is a $1,000, and if you have $1,000, then you could be trading binary options.

Binary options are only traded at Nadex, nowhere else, we’ll talk about this here in a moment.

So, you only trade Nadex but you can trade binary options with $1,000, if you have, let’s say, $2,000 – $5,000 this is when you can start trading options.

If you have anywhere between $5,000 and $10,000 of course you can still trade options, and binary options, and then you can also trade futures, and futures are fascinating to trade.

Now, if you have $10,000 or more then it makes sense to trade stocks.

For most people, I recommend that they are between $2,000 to $5,000 or $5,000 to $10,000 because then you can trade options and futures.

How much can you make?

How much can you expect to make with this?

If you’ve attended one of our Bootcamps that we do in various cities, then you know that it’s possible with the right money management to grow a $5,000 account.

Now, I always say I want you to focus on making $100 per week, so this is $100 per week on a $5,000 account.

Do you believe that this is possible?

I absolutely believe that it is possible. It is possible to make $100 per week on a $5,000 account.

Now, keep in mind, you will have winning trades and you will have losing trades. But the idea is that you make more money on your winning trades than you lose on your losing trades.

So, let’s say you risk $100 trying to make $200, and this where on average I believe it’s absolutely possible to make $100 a week.

When you do this and when you use a concept called Money Management, then it is possible to turn $5,000 into $41,400 within one year.

Does this make that now you can make a living day trading?

Of course not, right?

I mean with $41,000 now you have just a larger account size.

But the cool thing is, now you take the $41,000 and turn it into $150,000 – $200,000. And this is how you can grow an account.

This will not happen overnight and everybody who tells you differently is a liar, right?

It will take some time

It usually takes one year to grow a $5,000 account into a $41,000 account.

But from there it can grow into $150,400. So, a realistic timeframe to really trade for a living is three years.

Just be aware it’s not happening overnight and everybody who tells you differently, based on what I know, is a liar.

People will tell you that you can retire within a year, no, it’s not possible.

So, now let’s go back to Kim’s situation, where she said, “I only have $100.”

What can you do with $100?

How much money do you need to day trade? Can you do it with just $100?

With $100 there’s only two things that you can do.

First, you can absolutely start practicing because trading is a skill.

You want to make sure you practice your skill, and it’ll take several weeks until you’re good with practice.

Now, what else can you do with $100?

Nothing. What you need to do is save more money.

I mean, it’s just reality. Let’s be real here. I could sit here and say, “Oh yeah, my gosh! You will turn $100 into $10,000 or $100,000 but that’s not how it works.

Save some more money and start practicing. This is really, really important because you need to have this skill.

Example

Think about it, even if you are able to double, let’s say, $100 within a year, what happens?

$100 turns into $200. Is this exciting? No, of course not. So, this is where you’re still unhappy, right?

But when you start with $2,000 to $5,000 then you have a chance to grow your account into a decent account size.

Within the next 3 years you have a possibility to be financially free, right? So this is where I just want to make sure that you have realistic expectations when it comes to trading.

There’s one more thing that I want to mention here…

It takes money to make money

It’s just the reality.

I said in the beginning only open a binary options account with Nadex if you have less than  $1,000.

Yes, there might be “brokerages” who say, “Oh yeah, we’ll take your money.” But these are bucket shops. You might as well kiss your money goodbye.

When you give your money to these bucket shops you’ll never see it again. Any serious broker is requiring at least $1,000, some of them require $2,000 to $5,000 for a reason and now you know what the reason is.

All right, I hope this is making sense, because I wanted to answer the question, how much money do you need to trade? And more importantly, how much money do you need to day trade for a living?

To learn exactly what I trade, when I enter and when I exit, visit www.mytradingroutine.com I have a free, 35-minute video for you, no opt-in needed.

If this helps leave a below.

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