Capital needed for algorithmic trading at the retail level

How much capital is needed for someone who is new to algorithmic trading (but has the expertise to develop his own trading infrastructure) to begin trading?

Is 20,000 dollars a far too small amount to begin trading?

 

I would say no, that is not enough.

Pattern Day Trading requires $25,000+.
If you are not going to DT and it will not be a large portfolio, why automate it just because you can?

Bob

 

I just noticed you are from Canada. Not sure if you have PDT rules there.

 

Depends how you're defining algorithmic trading. $20K could be enough for low-medium frequency trading but you wont know until you're well on your way with developing your system, running back-tests and analyzing the results (e.g max draw-down)

 

I'm guessing, if the trading is automated, I could spend my day doing my day job and spend the night doing research on new trading strategies.

 

If you have the ability to automate you really shouldn't have to ask this question.

 

That will depend on the what you will be trading on and how you will be trading with your algorithmic trading. For some trading style and/or the investment instrument, $20K is more than enough. For some, it would not be nearly enough.

 

Focus on developing algos for the daily, weekly or monthly timeframes. That way, you can keep your day job and orders can be placed in the evening. Also, you can get up and running much faster since you will not have to worry about building an automated trading system.

fan27

 

Actually, I am a grad student, so I am free all day everyday except for my supervisor's weekly group meetings.

I would like to write software for intraday trading algorithms, but I am not sure why I won't have to build an automated trading system.

 

For an intra-day system, you will certainly need an ATS.