I often get asked how much money is needed to start day trading. Unfortunately there is no simple answer to this because everyone has different financial situations including bills, income and many other factors. That said, unless you are making eye-popping returns with little downside risk, you will require a reasonable amount of starting capital just to be able to pay your bills and meet your responsibilities from your trading returns, never mind being able to save up for an early retirement on a tropical paradise.
So how much money do you actually need to start a career as a day trader? How much starting capital will let you live comfortably and securely without the need for a regular job? It is far more sensible to ease yourself into the life, and slowly build up your day trading skills and your trading account until you are confident and financially secure.
Trading as a profession scales very well. From thousands of dollars to tens of millions, there are trading systems and techniques that are appropriate and profitable at every level.
Start off small by trading for a few hours each day. As your trading skills and account size grows, you will be able to increasingly rely on your trading income and scale back the time you spend at a regular job. Start taking on contract or freelance work, which will allow you to set your own timetable and focus on your trading, while still having a secure source of regular income.
Before you transition to day trading completely, be sure that you have enough money saved up to cover your expenses for a year if your trading fails to create a livable income.
So you will have to leave yourself a cushion. The globalization of the financial industry has allowed the development of trading platforms that exist outside the regulation of US law. These brokers also offer higher margin levels and access to a much wider range of securities than traditional retail brokers. Start off small, and slowly transition to day trading as a career as you gain skill, knowledge, confidence, experience and capital.
Soon enough you could be living the day trading dream, whatever that means to you. The important thing to remember here is that you need to give yourself enough time to master your trading strategy. For some traders it can take a few months while others it will take well over a year.
If you have any questions about starting a day trading account, let us know in the comments below! Final Thought The important thing to remember here is that you need to give yourself enough time to master your trading strategy.More...