Hey Market Pilots,
New traders often ask me how much money do they need to have to be able to trade. My first answer is “none” because I suggest they paper trade before using real money. If for no other reason than to learn how to use the platform and avoid pushing the wrong button. I speak from experience because when I was in college, I was guilty of pushing the wrong button which cost me more than I would like to admit.
The other reason to start with paper is that you may not have a clear mind, think straight, or have the ability to make mistakes when real money is on the line. When your hard-earned cash is at risk, all sorts of screwy things happen in our brains and we become our own worst enemy. Move your ego aside, and just paper trade for a while. Trust me, I’ve been there, and it was an expensive few years.
Now that we have that covered, back to the question: How much money do you need to trade? Now, my answer would be “just enough to buy at least one share in a few different stocks. If you want to work in the lower price range, I suppose that could be $100 if you work. But I always recommend starting with a range of $500 – $1,000 because this is just enough to buy stocks that can cost $150+ per share.
But really, any amount is good, and here is my proof.
As you can see, I trade a variety of account sizes ranging from $5,000 to nearly $1,000,000. The important thing to note is not the dollar amount, but rather the percentage gain. Each of them increased by about 5% yesterday, July 8th, 2020. What this demonstrates is that I trade all of my accounts about the same. So if you have a small account, take comfort in knowing that I trade my small account in the exact same way that I trade my largest account. The difference is scale and that is what initially attracted me to the market.
I was really enamored with the idea of scale when it came to account size. I knew at the beginning of my trading career that someday I would graduate from putting $1,000 on a trade to putting over $100,000 on a trade. But did I work any harder? Did I put in 100X more effort? Did I clock 100X more hours in the week? NOPE! Once I had acquired the skill of trading with my indispensable Moxie Indicator, it was simply a matter of time before my account grew and compound it every year. Now I can make $30,000 in a day instead of $3,000 and it was all just a matter of time. This is why we trade. This is why we are drawn to the market. We can do the same work and be rewarded bigger and bigger each year as our account grows. It’s the same 5% gain, but now it’s on a million dollar account instead of a $1,000 account. It all just has to start from somewhere.
Over and Out,
Your Profit Pilot