You Must Be Rich to Start Trading

Don’t get me wrong: No one should be speculating with money he or she can’t afford to lose. If you’re interested in day trading stocks, you must open an account with at least $25,000, which is more than most people can lose without suffering major repercussions. You shouldn’t take out a second mortgage or bet the kids’ college fund on a trading strategy, regardless of how confident you are in your abilities. Trading is stressful enough without worrying about the potentially devastating impacts of losing money if you don’t have the appropriate means.

That said, you can also open a small account with a discount broker by using just a few thousand dollars, and trade lower priced stocks or futures contracts. In order to trade futures with a small account, you should concentrate on futures contracts that aren’t terribly volatile or use some sort of strategy that employs stops to limit losses. You can get started with a small account, but you should be prepared to either expect limited returns or use very tight stops.

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