How much $Money$ do I need to start?

I often get asked ‘how much money do I need to start trading?’ The answer can very from person to person but here is a general guideline:

If you are a beginner trader and want to start your own trading account I would not do so with less then $3,000. If your account is this size I would recommend focusing on stocks in the $10-$25 dollar range and holding your positions longer. This is to avoid the erosion caused by trading fees. If you just want to take trading for a ‘test drive’ you can open a paper money account to see how you do. Paper money is not real so the experience will not be real either… but it will give you a chance to take some trades without any risk.

If you want to take 15 minute to 5 day positions then I would recommend having over $10,000 of capital.

As you will see most of the time I will commit $5,000 to $15,000 to one position. My goal is to hold a postion from 2-60 days. I also set my Stop loss close enough that if the stock goes against me it will trigger my Stop for a loss of less then $500.

Some platforms offer free trades to get you started. If you use the promotional code kenut8ia you will get $50 in free trades with Questrade. I opened a TFSA with them and the process went quite well.

- Steve -