How much cash should you start with?

Beginner Questions Trading Psychology
41

But what to respond with when someone asks how much money to put in?

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42

This is a key question and its a question that could be used to force new traders to be realists about their whole aim in trading, not just how much money to put in.

What I mean is that they should be advised to suggest where they want to be in 3 years’ time. If they want to be receiving a massive income in 3 years, then they have only 3 choices -

  1. put a lot of capital in
  2. have a fantastic strategy
    If they don’t have 1 or 2, then -
  3. do not trade, you won’t be where you want to be in 3 years. If they go ahead anyway, that failure will probably compel them to take ridiculous risks and wipe out the account.
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43

Personal opinion -
Start with Minimum 500$ but if you are really planning to make a monthly income out of this, at least 2,000$, If anyone I asks if they can start with less, I direct them to School of Pipsology lesson about “What happens when you start with 100$”

44

Cash isn’t a big deal rather experience is. If you don’t have trading experience, you will even lose a million within a couple of days. Contrarily, if you have experience, you can grow a 100 dollar account a million and it’s only possible by trading experience.

45

Actually, new traders need to start with demo! If they are consistent enough in demo, only then they should go for the live trading! By the way, I don’t think $2000 is not a small amount to start with!

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46

Very practical. Makes sense. Now what if they say they don’t know where they want to be in 3 years time and are just trying it out?

Ok this is what I’d probably go with. I used to give $300 as a number (because that’s where I started lol) but perhaps $500 is a better starting point.

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47

yeah, the thing is, when/if someone says they can’t invest that amount, They could simply just wait another month/two or few months and get to that point, and use that time also to keep learning, the more you earn the more chance you have to be successful.

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48

If they say that they don’t have a 3yr plan, then they might just as well be ignored as happy-go-lucky gamblers seeking a bit of fun and excitement. They’ll lose their money but they will be entertained as they do it.

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49

We can also ignore them when they turn up here having lost all their money. In a sense, without a long-term plan, losing all their money is what they “planned” to do - “Fail to plan, plan to fail”.

50

This is truly the answer, fortunately or unfortunately. Fortunately, because hey at least they should know what to expect but unfortunately because this happens I feel like 95% of the time.

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51

I would suggest you to start with what you can afford to lose because the amount of money you add in your real account for the first time may not be safe as you are still in the learning phase. Some start trading with a very small amount and gradually grow their account as they gather experience and enhance their trading skills. Even though that amount may not feel ideal as the profits will be lower, having a small account will lower your stress and anxiety as a new trader for sure. So start small and grow more. Wishing you all the best!

52

In my opinion, you should start with a demo account, and then move onto a live one. That way you have some knowledge about whether your strategies will actually be worthwhile and make sense and profit you. Don’t rush into things headfirst, take your time in learning.

53

We know that the forex market has no limitation when it comes to how much money you can trade with, so start according to your convenience. However, your profits are directly proportional to your capital.

54

You can trade with as much as you can. But it is better to start small and risk what you can afford to lose. Risking 1-2% of your trading capital is good for new traders.

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55

You’re quite correct - the risk is the money that you can lose per trade, not the total account capital. It doesn’t matter how much money is in the account as long as its with a legitimate broker.

56

That’s a really smart idea and totally I can work with that

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57

Once I was doing OK on demo I started real trading with an account of £25,000. I was already in my 40’s and been on demo for a year. I told myself that that was the only capital I would ever put in to this trading venture. If it went well with that amount of capital then I’d get to where I wanted to be by the time I retired (assuming minimum 10% p.a returns), if it didn’t go well, then I’d just never trade again. But any less and I probably wouldn’t rake in any ‘serious’ money for years. 3 years on luck has been kind to me and I’ve never blown my account. I am now trading just with profits. :crossed_fingers:.

58

No doubt Demo is the best way to start with; and I believe new traders need to use demo for a long time! On the other hand, most of the new traders lose their 1st real account! So, don’t invest your all money for the 1st real capital!

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59

Yes. I agree. And I should have said that although I started with a large amount, if i’d lost even half that i’d have considered my account “blown” and stopped trading.

60

Well, everyone has his own real amount and for some it’s 10 thousand dollars, and for others, it’s about 10 dollars. The main thing is this amount should not be the trader’s last, and some of the money is invested in other assets. It is very difficult to work with just one hundred dollars because not everybody is able to keep money management on such an account and earn $5-10 dollars per month in net profit.
You know, it’s very hard to find money to start trading in times of crisis. As in any case, this money will be lost. Perhaps, the way out is to find a robot that would earn at least 10-20%, and therefore with reinvestment every month the deposit can be increased not bad.