How much money do you need to start investing?
Here is some insight on how much money you need to start investing.
Congrats! You have taken the first step to figuring out how much you should start investing with, this is one of the most common problems most traders face as they are first starting out.
If you have no idea where to start you can ask yourself how much money do you want to see in return and then work backwards.
Then ask yourself, is that number a realistic number for you to invest at the moment?
Your objective is to figure out what a realistic dollar amount you are willing to “risk” or use to invest with. This is probably the most challenging portion, because based on what you have saved, your income, your job security etc. all may play into your decision. There are many factors that go into calculating what you are willing to initially fund your trading account. The correct answer is there is no correct answer simply because everyones finacial situation is different. The key is doing what is best for you and your situation. Once you figure out that dollar amount you are then you truly are able to come up with some realistic goals.
To work backwards you need to figure out what % gain or goal average you plan to have per month, per week, and then per day. So not only for you to set goals you can have a realistic expectation and set a road map for your future investing plan drawn up.
Here is a short example of how you may choose to calculate potential trades you will make,
$1,000 Starting balance
2 x Trades per week with full account value (Trading with full account value not recommended just using it as an example)
Each trade only profits average of 1.0% = $10 profit per trade
$20 profit per week Total account growth 2% per week (Not re investing profits)
$80 monthly profit or 8% of total account value
(Without taking into account reinvesting profits, without taking in to consideration and losses or bigger gains, and without taking account for any additional money added to the account)
These are all things you can choose to calculate in, it really just comes down to your trading consistency, how much you are trading with, if you are over the pdf rule etc. everyone is different.
There are literally so many different combinations of examples you can put together on what % gain per trade you plan to make, how much of your entire trading account you use to trade, how much of your profits you choose to reinvest and trade with.
The best example is your own example and using the numbers that you will be ultimately comfortable with.
A few rules you should always remember when choosing how much you should fund your account with:
Invest small, risk small, lose small, LEARN BIG
Never risk more than you can afford to loose
Be conservative with your goals
Focus on consistency, win to loss ratio not just $ gain
Always prepare for the worst case scenario
DON’T START TRADING UNITL YOU HAVE PAPER TRADED
If you have any questions about getting started or funding your account, I personally use the WeBull trading platform. Click this link here to receive free stocks when you fund your account: https://bit.ly/JOINWEBULL
Ready to start networking with other traders? Join our free discord: https://discord.com/invite/kwVQtmu
Still don’t know what you are doing? Ready to start learning with structured content? This is what Learn Plan Profit is for, learn more here and get $100 off: https://bit.ly/100OFFLPPNOW