Becoming a day trader is a hot topic in
these times, and for good reason. Many day traders have done very well in this
market. There are all types of traders; some are only part time and others have
turned it into a full time business. Whether you are ready to quit your day job
to become a trader or you fill in your extra hours trading, there are some
startup costs you should take into account. Depending on the type of trading
you are considering, the requirements are different. Once you decide on the
market and the style of trading, you can pretty much calculate what your
expected costs will be.
Funding Your Account in the Stock Market
If you’re interested in working in the
stock market, it requires a significant amount of cash up front. That’s why
most beginners do not choose the stock market. Once a trader has been working a
while and gained experience, then it makes more sense. According to recent
regulations, a trader must make a minimum deposit of $25,000 in securities
or cash with your broker. To achieve the status of day trader, you need to make
at least four day trades per week. Since that account balance must remain at
$25,000, you’ll need to have at least $30,000 to be a day trader. Unless you’ve
just won the lottery, you probably won’t have that much disposable income to
use for starting.
Minimum Amounts to Enter the Futures and Commodity Market
Futures and commodity markets are much more
lenient than the stock market. Check around with different brokerages to find
their requirements, but it’s possible to begin a futures account with only
$2,500. A deposit of $5,000 or $1,000 is more typical, although this does not
include the amount of capital in your account to be used as margin when trading
specific futures contracts.
Beginning as a Forex Day Trader
One of the markets that is grabbing traders
by the throat all over the globe is the foreign exchange currency market. Those
entering into day trades in forex can find free access to trading
platforms and can even locate a brokerage that doesn’t take commissions. In
this instance, brokers would get their fees through the ask/bid spread. The
sizes of the trading units are flexible and they can begin with practice
accounts through their broker. Forex traders have the possibility of trading
pics (or tick) sizes of less than $1.
How much can you open a forex account with?
While there are some brokerages that do not require a minimum deposit, you will
need to have enough money in your account to make a trade. There is a
relationship between how much is in your account and the size of a trade you
can enter. But really, with as little as $200, you can adjust the unit trading
size in order to meet margin requirements. Of course, you won’t become a
millionaire very quickly with only $200 in your account, but it can get you
started!
Post a Comment