[Music] How much money do you need to start day
tradin. Well it's pretty simple if you want to make 1 million dollars then just
start with 5 million. Ok. Ok. How much money do you really need to start day
trading this is perhaps one of the most commonly asked questions from new
traders on my youtube channel i've been day trading for more than 7 years now
and let me tell you day trading is definitely not as easy as download
robinhood deposit 100 click buy buy buy and get ready to bank
on the moon i wish it was that easy
in this video i'm going to be talking about realistically how much money do
you need to start day trading as a beginner there are three key factors for
you to consider depending on your situation and we're gonna be breaking
that down so you know exactly how to get started entering the market as always
these videos take me a long time to make that's the time i could have spent
driving around in my lambo chilling on the beach and banking on my toilet so if
you don't mind please remember to drop a like on the bottom of the video and
subscribe if you haven't done so already thank you so much for doing so and in
return i'll make sure to keep delivering you some bad jokes so that starts with
the facts first generally speaking when opening a brokerage account to start
trading there are two groups of people those who have over 25 000 dollars to
start with and those who don't and this is definitely the number one factor for
you to consider when planning to start day trading i don't know about you but
when i first started over 7 years ago i did not have 25 000 dollars lying around
in my couch to start day trading trust me i checked
so i definitely fell under the second group of people and if you're a baller
who has over 25 000 dollars to start day trading you can jump straight to this
time stamp right here and i'll discuss some very important tips for starting
off with a larger amount of capital over twenty five thousand dollars now for the
rest of the ninety percent of us who did not have twenty five thousand dollars to
start don't worry i got you here first of all we need to understand why 25 000
dollars is such an important number if you are in the united states or simply
just using a us-based broker you might be subjected to pdt rule if you are
trading with a small account under 25 000
pdt rule stands for pattern day trader rule basically it limits how many times
you can day trade if your account is under 25 000
under this pdt rule the day trader can only place up to three day trades in a
consecutive five day period so if you're a new trader in the united states with
less than 25 000 dollars in your trading account then unfortunately this rule
applies to you i know this really sucks it makes no sense that the sec limits
what you can do with your own hard-earned money however if you're
living outside of the united states there are some variations depending on
which country you're in for example if you're in canada like i
am and using interactive brokers trade 0 or quest trade then you do not have to
worry about the pdt rule even if you are funding with less than 25 000
you will have no limitations on how often you can place your day trades i
have a dedicated video talking about this pattern day trader rule in detail
if you want to learn more about it later on now moving on to the second important
factor to consider when you're starting out as a day trader instead of thinking
about how much money i should fund my account in order to make 100 a day
think about how much tuition i need to pay in order to start learning about the
market in real time let me explain day trading is a very lucrative career but
for those who are experienced and educated enough to treat it as a
business from my own personal experience trading the market for more than seven
years now traders should start with a minimum of four to five thousand dollars
ideally anything less than two thousand dollars in my opinion is too little just
like going to school or college you are paying the tuition to learn a skill from
an expert in a particular area you need to be focused on education first so you
can use what you learned to make money from that education in two or four years
or if you're a doctor maybe not even until year 8 or year 10. the point is
that the money you have now is for you to make more money later on not right
away i did exactly just that when i went to
college and paid six figures in student loans and went to study for four years
got a degree and i started working and earning five figures and slowly higher
towards six figures much later on that career in vfx didn't exactly work out
that well so i eventually quit to day trade full time but that's another story
for you to watch after this video anyways that's why i highly encourage
new traders to treat day trading the same way when they first get started
don't focus on making money focus on spending that money to learn first you
should treat that four to five thousand dollars as market tuition and expect
that you'll probably spend at least 50 percent slowly during the course of the
market education and that's the amount you spend covering the trading
commissions live market data subscriptions short locate fees and
making small mistakes here and there costing you 10 to 20 dollars for each
trade with small sizes i also encourage you to find a mentor or a community of
traders to learn from just the same way you would if you were going to college
you can check out the humble trader community down below or sign up to our
free weekend watch list sent out every single sunday the links are in the
description below starting in the middle of 2020 most brokers have waived the
minimum capital to open a trading account with them it used to be that
everyone required twenty five hundred dollars to sometimes ten thousand
dollars but that's no longer the case nowadays if you want to open a brokerage
account you really just need to hit that like button and voila your trading
account is now funded completely for free okay i'm just kidding even without
the broker minimums i still believe new traders should start with a minimum of
four to five thousand dollars it'll give you the best chance to learn make some
mistakes and recover from those mistakes and eventually become consistent and
profitable over time assuming you learn to be disciplined and use good risk
management now what if you have less than four to
five thousand dollars yes you can still open a trading account but make sure you
start with live data simulated trading essentially pay per trading my
suggestion is still the same focus on learning with paper trading first and
collect screen time and experience on that note here are some trading brokers
for you to consider if you're opening an account with less than 25 000
these are interactive brokers think or swim and trade zero
moving on to the third important factor when opening a trading account to start
day trading this is more so for the second group of people if you have more
than 25 000 do not i repeat do not start trading
with your entire 25 000 unfortunately i've seen this happen way
too often to beginner day traders there are many people who have good income
from their careers as engineers doctors and lawyers
aka all the careers my parents wish i had gotten into
and now i'm the disgrace of the family anyways for the new traders who have a
substantial amount of capital to start with that's amazing you don't have to
worry about the pdt restrictions but my recommendation would still be the same
start trading with small size and risking fifty dollars or hundred dollars
or any small amounts that you are willing to pay as market tuition
in fact it's even more important that these traders starting out with a big
account trade small first and focus on learning you don't want to be in a
situation where you start out with 5 000 shares chasing the high of the day
breakout and suddenly get dumped on and your big account of twenty seven
thousand dollars is now down to ten thousand
sadly i've seen the scenario play out way too many times but hey at least they
had ten thousand dollars to lose when i first started our day trading losing one
hundred dollars was devastating that's half of a days of work for my full-time
job at the time just because you have a big trading account and no pdt
restriction doesn't mean you get to skip the proper steps of day trading and
throw risk management out of the window on that note if you're opening a trading
account with more than 25 000 basically over the pdt rule i'd
recommend brokers such as cobra trading center point securities and interactive
brokers learning to trade and making profits
from day trading are two separate goals and you cannot achieve the second
without working on the first like i just mentioned previously as a beginner day
trader just starting out your focus should be on learning and observing the
market not um trying to make money whether you
are starting out with four thousand dollars or if you're a baller with more
than 25 thousand dollars the takeaway is this
focus on learning before focusing on earning
so if you want to treat this day trading business seriously you better be ready
to put in the hard work if you're interested in learning more about day
trading strategies including risk management and trade planning feel free
to check out the humble trader community down below
thank you guys so much for watching as always i'm the humble trader and i'll
see you guys next time
[Music] you