How much money do you need to start day trading? 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 gon na 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 you.