Hey hey: what's up my friends, so in today's episode i want to talk about how much money do you need to start stock trading? I know some of you might be thinking. Ah right now, that's a c question man. You can start with as little as 50. Bucks or even 100, look at all this.

You know zero commission brokerage available out there. These days i get it you can start with technically yes, you know 50 100, it's possible, but the problem you'll face when you have such a small account dedicated to stock trading is a few things number one. It's near impossible to apply proper risk management. For example.

Let's say you have a hundred dollars trading account. Let's say you want to risk two percent risk on each trade on a hundred dollars account. It means that when you put on a trade, you cannot lose more than two dollars on that trade. I would say it's near impossible: it's very difficult right to have your stop-loss of only two dollars.

So that's the first problem you'll face, and this brings us to the second problem - is that if you do not have proper risk management, it's a matter of time before you blow up that small trading account. Okay, and if you think about this, if you blow up like you know 10 20 small trading account that ends up being actually a decent sized amount of money, like you know one or two thousand dollars. Okay and finally, the third thing is that, when your account size is too small, you are limiting yourself right to the universe of stocks. You can trade, probably just you know, penny stocks, for example, if you're not you know, dealing with leverage or margin, you're, probably just dealing with penny stocks.

Those are the stocks that you know can accommodate your account size and those stocks. You know swing widely up and down, so this is why i suggest right not starting right with you, know: 100 50 or 200 stock trading account. So now you might be wondering okay. So what's the answer man? How much should we start with? So, in my own opinion i would say right: you should start with at least a five thousand dollar stock trading account.

Some of you might not have that kind of money we'll get to that later, and the reason why i say five thousand dollars is a few reasons: number one. You can have proper risk management with a five thousand dollars account and you're, risking two percent on each trade. For example. Let's say you know two percent risk you can lose up to a hundred dollars.

You know of your five thousand dollars account so with a hundred dollar stop loss. You know you can do a number of things you can buy. Let's say, for example, a share that cost hundred dollars and let it go to zero. That's a hundred dollar loss.

You can maybe trade. You know two shares that uh you can. You can buy two shares that it's worth fifty dollars. Let's say you know share is over fifty dollars.

You can buy two shares of shares and that's you know again if it goes to zero. That's a loss of 100 still within the two percent risk management and again here we are just talking about if the stock goes to zero. Of course you won't let it go to zero. So what i'm trying to bring across is that, with a larger account size with a larger nominal stop-loss value, you have more room to play with you.

Have more stocks to choose from you. Have you know more options? Okay, so once you have proper risk management, this brings us to the second point, which is you can avoid account blow up, because now you have proper risk management in place. It will you know if you follow the rules, your risk management guidelines, it's unlikely that you will blow up an account and finally, the last benefit is that you can trade more stocks out there. I won't say you are able to trade all stocks because some more volatile stocks, like maybe you know those higher price stocks like tesla amazon, their swings ups and up and down right, it's easily more than hundred dollars.

So that is stocks that you will probably still avoid, even with a 5k account, but you can now trade other stocks like maybe which are priced at 40 50. Those are now stocks that you are able to trade compared to you know, having like a small account like hundred dollars or 200, so that's kind of like uh at another advantage. I do having a decent sized stock trading account. So at this point some of you are thinking: okay, rain.

I don't have 5k man, you know. So, what's your solution so two options for you number one. If let's say you don't have five thousand dollars, maybe you only have five hundred dollars five hundred dollars. My suggestion is, to you know: do paper trading? Yes still in the live markets, but paper trading right, so there is no kind of risk to you involved.

So, in the meantime, while you are doing paper trading, you can get familiar with your trading strategies, see how it performs in the live markets, get comfortable with your platform and over time right, save up that money from 500 you save up to a thousand two thousand Five three thousand - and you know eventually, to five thousand dollars, and hopefully, during that period, when your paper trading, you gain confidence in your trading strategy, you can now take it in the live markets with five thousand dollars in with proper risk management. That's key right! There's! No point trading a sound trading strategy, but you only have 200 in your account and you can't apply proper risk management that sound trading strategy is still going to fail because there is no risk management to it, make sense. Okay, and if you don't go down that route, then the other option that i have for you is to trade other markets markets like forex, allows you to trade. Nano lots with a 500 account.

You can still apply proper risk management and that's probably a topic for another day. So that's my other solution to you. So as a quick recap, let's talk about what we have discussed. If you want to, you know, get started in stock trading.

Yes, you can start with 500 200 bucks, but you will likely blow up the account. So my suggestion is to start with at least five thousand dollars. You can trade most stocks out there. You can apply proper risk management and, more importantly, right, it prevents you from blowing up your trading account make sense so with that's it.

I wish you good luck. Good trading! I will talk to you soon. You.