What is a good amount of capital to have before attempting to trade for a living? I have been trading for 3 years on the side and within the last 8 months turned 50k to 75k. I have to admit that a 50% gain in captial is nice but 25k is nothing compared to my current job. I'm thinking you need at least 100-200k to trade for a living. I'm a position trader and believe the most important thing is captial preservation. The second most important thing is making money. With 200k, I may be able to look forward to making 100k a year if I trade consistently. My guess is that it depends on the style of trading. Some people could probably do it with 50k but it would be much more riskier day trading it. Joe
I personally trade with a constant balance of $50,000. All profits I make every week are swept out of my account either as a check from my broker or a wire transfer. With margin I have $100,000 worth of buying power, but I rarely use all of it. I'm able to trade whatever I like quite successfully, so I believe that while capitalization is important, if you have more than $25K it shouldn't be as much of an issue as simply learning to be a great trader.
Zboy: Do you have a limit to how much of the trading account balance to use on one trade? I have heard some no more than 25% but that may be for holding overnight for swing trading. Thanks, Jeffrey
You definately do not need 100-200k to trade for a living, when I started I had a little less than 25K and earned 6digits my first full year of trading for a living. PEACE Commisso
Commisso: Hi, I have made a committment to trade full time, and would like to here your experience. I may be able to get some insight on change of lifestyle, or how to deal with stress at first. I started a construction business, and went through a lot of stress at first. Now I've decided no more dealing with either working for others, or stresses of dealing with others working for me. It may be personal so you can email me through my profile. Thanks, Jeffrey
Hi Jeffery, during the mid-day duldroms or over the weekend i will email you.....I'll help in anyway i can... PEACE Commisso
Jeffrey, Regarding how much capital I allocate to a position, it varies, but often doesn't exceed 30% of my total buying power (i.e. $30,000). However, if a trade is continuing to go my way I may add to the position and use a little more of my account to augment the position. I also don't usually have more than one or two trades going at one time, so I am never completely maxed out on my account buying power.
From trading firms I get a consistent 50k mark. Keep in mind that your trading capital should not include 3-6 months living expenses which should be kept separate.
I would think about 50,000. This would be cash after the learning curve. So starting out one should have 65,000 or more, and expect to lose 10,000 or more (probably more). In my opinion to do "it" right, and make a "good" living you may need more than 100,000.