How many times did you ask this question to yourself?
If the answer is “plenty”, no worries: it is one of the most commonly asked questions in trading.
There are no short answers for such an important matter; anyone who is searching for them is going to receive short-living solutions.
But being a successful trader is not a short-living solution, it’s a LIFE CHANGING one.
It is true: to reach this goal everything needs to be clear from the start — this is why you deserve a useful and completely honest answer.
We must then explore this matter in two different parts:
Part 1 – The Concept — what’s truly behind this question and the concept of trading for a living.
Part 2 – The Practice — A practical guide to determine your necessary capital.
If you don’t need “Part 1” for whatever reason, you can skip to the practical part.
Part 1: The Basis
What’s your goal?
The first and most important thing regarding trading for a living is your original purpose.
It is not enough to say that you want to be a trader for a living. You need to have everything fixed, specified as you would want to reach a certain street with a GPS.
The GPS is your mind. The more powerful and precise, the better the route towards the destination, which has to be detailed from the very start. As a result of this efficiency, you reach your place in the fastest way.
To individuate your true purpose easily, ask yourself these questions:
• How much wealth do I want to build?
• How much money do I want to make in what recurrence?
• How much time am I willing to dedicate to the process?
• What am I going to sacrifice?
• Who do I want to be in the trading world?
Ask yourself these questions before anything else. They will help you foresee your path — being crystal clear inside will make it easier to clarify everything outside.
Once your goals are powerfully settled, you’re well ready to begin the journey. Making a strong-willed choice is a hard accomplishment, and you should be proud of yourself.
How much knowledge do you have?
This is a key factor when talking about trading for a living. A trader can have any amount of money, but if he’s not acknowledgeable enough to engage with the market, he will inevitably lose everything.
Define this attribute to know what is your current state. Given that no knowledge is ever at its maximum, there is at least a sufficient amount that permits a trader to seriously start building wealth.
The second step is to reach that sufficient amount. But be aware that your knowledge has to constantly grow because your money is supposed to do accordingly.
The amount of money you obtain from the market is and will always be correspondent to the amount of knowledge you obtain from the market.
If you learn nothing from it, you’ll end up having nothing. But if you obtain a lot of knowledge, then you will be rewarded with as much money.
What to know before determining how much money you need
Abandon common thinking.
One of the biggest mistakes that common people make is to consider trading or investing as something for those who got plenty of money. It was once, but nowadays there’s too much technology to take it for true.
A lot of trading professionals also say that you need at least 5 figures to make real money in trading and investing.
This is not necessarily true.
We must first consider what “trading” and “investing” truly mean.
These terms represent a universal dynamic. Everyone invests something in every single moment. When people say investing isn’t for them, they are victims of a social bias.
When you go to work, you’re investing your time and labor for money. When you buy your groceries, you’re trading your money for them. When you have a friend, that friendship is the result of a reciprocal investment in trust and faith on the other; the same goes with love.
Moreover, universal dynamics are often not moral and can’t be morally described. The market itself is everything but moral: it is indeed very rude for the ego.
Admittedly, both the market and universal dynamics are just.
To trade for a living, you need to abandon fictional moralities and start thinking with unbiased justness.
You’re going to meet difficulties and advantages regardless of your capital’s amount
Trading for a living means a lot of things. First of all, it is not true that if you start with a big capital it will be easier for you to make money.
The market doesn’t care about how much money you can invest.
Each class has its advantages and its difficulties. Everything is perfectly balanced.
The fact that big traders and institutional investors are those who truly profit from the market does not depend on how much money they have, but on their capability to use it as well as understanding the environment in which they invest and trade.
A billionaire who got rich thanks to inheritance and starts trading without experience and knowledge is going to lose every penny as well as a broke dude who invests 10 bucks into a blue chip with zero clue of what he is doing.
The market always finds its way to give you what you truly deserve, be it wiping out your money or life-changing gains, and it doesn’t care about who you seem to be.
For this reason, your starting capital is incredibly negligible in terms of positive outcomes.
You’re going to meet difficulties and advantages in every situation. For example, if you have a large capital, you will incur liquidity problems, but better trading systems are available to you;
If you’re broke, you will need more time to reach true gains, but you have a lot more freedom and possibilities over the market since your positions do not influence the environment and can go unnoticed.
Your desire to learn is much more valuable than any money you can start with
All of the reasonable points described until now demonstrate that the a trader must firstly LEARN TO TRADE before making any true money, regardless of how much you already have in your pocket.
The money you have is not important. If you know how to trade, you can make a living with $1,000 as a starting capital, or with $10,000,000.
In the beginning, is not the money you make that will define you as a potentially successful and wealthy trader — it’s the way you learn, how much you learn, and most importantly, the positive desire you have.
If we may say it right, it is better to start trading with a small capital, rather than seeing plenty of money evaporate in the market for free.
Therefore, if you’re pretty much broke, get no worries: indeed, you may consider yourself fortunate, because you can efficiently prepare yourself with a small capital and being an absolute PRO once wealthy, without having suffered enormous losses.
As a conclusive sentence about this whole concept we can state:
You don’t need a lot of money to make a living from trading, you need a lot of knowledge, consciousness, and discipline.
Conclusion of Part 1
Such questions require powerful answers and a strong understanding of all the concepts behind them, to have everything clear from the start.
With your worthy commitment, we have defined your true goal, but also we have deepened our knowledge and why it is so important compared to anything else.
If you become acknowledgeable enough, you can reach every kind of wealth you aspire to, and yes, even if you start with little capital.
But how is that in the practical world?
Here it comes the boss of all bosses of wealth building.
We will meet him in the next part:
How Much Money Do You Need To Start Trading For A Living? Part 2.
Everything described in this article has the sole purpose of being informative and providing general information. The author has no intention of providing any financial advice, legal advice, or tax advice. Do not rely on this article to make investment decisions. Seek professional help before making any such decision. The author does not take any responsibility for loss or damage of any nature. The use you make of the information contained in this article is your sole responsibility.