How much money does it cost to start day trading is one of the most common questions that I get when people contact me about getting started. I try to be as clear and honest on this site as possible and the answer to that question is very complicated. The reason why is because when someone starts day trading there is a learning curve which involves training. Training is unpredictable since everyone is unique and more importantly, everyone learns at their own speed and capacity.
I’ve shared the truth about day trading companies in a previous post and in order to get started you need to have a strategy or system that truly works (click here).
You can spend thousands of hours back testing something that you think works or you can just find someone that has already done it for you. I don’t know of many people in our society today that would want to take the time to do to it themselves.
There are numerous companies out there that offer their services for $5,000 and up which will push your initial investment to over $10,000 easily. I don’t know of many people that have that kind of money laying around. It wasn’t easy for me when I first started, especially since I lost $25,000 in student loans in a month.
Getting started day trading is one of the cheapest businesses that you can start considering that a food franchise will run you upwards of $100,000. A McDonald’s franchise is reported to cost a minimum of $1,000,000, that is guaranteed money of course.
If you take day trading seriously you can make $150,000 in the 1st full year of trading.
That is assuming only 200 trading days a year (3 months vacation) and the absolute lowest profit potential that anyone can make in the emini futures market. Futures have a much higher profit potential than regular stocks. This is also after your training which will take a specific amount of time as well.
The amount of money you need to start day trading is roughly between $5,000 and $6,000 in my opinion. That includes everything that you need to get started, no hidden fees or extra costs. Let’s assume that you are able to find an affordable strategy at $2,500. Here is a break down:
- Day Trading System/Strategy: $2,500 – $15,000
- Initial Capital: $2,500
- Day Trading Platform (that strategy runs on): $180-3 months
- Monthly Coaching: 4 months at $100-$250 a month
You don’t have to spend this all at once since the payments will come in phases; first the day trading strategy, then the initial capital and day trading platform about 1-4 months after, and finally the monthly coaching after 60-90 days.
Understand that most day trading companies in operation today will give you between 60-90 days of free coaching and then offer the monthly coaching at a “really good price” as they say in Madagascar. This isn’t to say that you can’t spend more to start day trading. If you would like to spend $10,000-$20,000 to get started day trading then by all means do it if you think it’s a good investment.
If you want the opinion of a man (I’m still a kid at heart) that has been in this industry for almost 10 years, you shouldn’t spend more than $6,000.
One thing to remember is that you need to open a brokerage account with at least $5,000. You can withdraw that money out and just keep a lower balance but $5,000 is required to open an account.