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This is one of the most common questions of newcomers. The short answer is a lot. Trading for a living is just like any other traditional business. You need a significant amount of money to do it. You wouldn't try to open you own restaurant with $2K so don't do it in the markets. Over the years I've heard lots of people's starting amount and I can assure you nobody has gotten rich by starting with a few thousand. Some people come into the markets with at least $100K and even that is on the lower end. I've heard of people who started with 1 million or more. I started with $1700 so don't feel bad.
I even wrote an article saying you should scrape together $2000 to start with and I still completely believe that but I also put a disclaimer in that article saying that amount is only to get your feet wet. Once you have a better understanding of what you're doing you should start brainstorming ways to get more funds for trading outside of the market. Most people don't get rich from scratch on Wall Street. More often than not they already had a business outside of finance and are just using Wall Street to further their net worth.
The amount you need to trade for a living should be enough for you to live on and enough for your account to still keep growing. If your monthly expenses are $2K then you're going to want to be making four or five times as much in the markets per month. That's the only way you could ever get to any significant levels of net worth. Chances are you're not in the market just to pay bills but if you are then just making $2K per month is fine but keep in mind that you will have some losses and uncle sam sees your income as $2K per month from the markets so your account will take a hit at tax time.
To sum up:
You need at least 100K to trade for a living.
Your monthly market income needs to be 4 or 5 times your monthly living expenses if you really want to make a significant amount in the market.
I even wrote an article saying you should scrape together $2000 to start with and I still completely believe that but I also put a disclaimer in that article saying that amount is only to get your feet wet. Once you have a better understanding of what you're doing you should start brainstorming ways to get more funds for trading outside of the market. Most people don't get rich from scratch on Wall Street. More often than not they already had a business outside of finance and are just using Wall Street to further their net worth.
The amount you need to trade for a living should be enough for you to live on and enough for your account to still keep growing. If your monthly expenses are $2K then you're going to want to be making four or five times as much in the markets per month. That's the only way you could ever get to any significant levels of net worth. Chances are you're not in the market just to pay bills but if you are then just making $2K per month is fine but keep in mind that you will have some losses and uncle sam sees your income as $2K per month from the markets so your account will take a hit at tax time.
To sum up:
You need at least 100K to trade for a living.
Your monthly market income needs to be 4 or 5 times your monthly living expenses if you really want to make a significant amount in the market.
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