How much do you need to start trading in the stock market?

Question

I have some mutual funds but I want to move to stocks... I have the time but how much money do you need to get your feet wet? Thanks!

Answer 1

just like going to a casino...how much money can you afford to gamble with? to lose?
you can start with [highly speculative] $2-$5 stocks....and there are plenty of stocks under $10
so....a couple of thousand dollars...
or
if your mutual funds pay a dividend/interest
that is, you are not dripping them
...take 20%
[ONLY 20% !!!...NO MORE THAN THAT!!!]
and use the dividends/interest as "play" money

why 20%?
simple...
the first 50% is for your long term, safe, secure investments
the next 30% is for taxes
then and only then, use the 20% to get your feet wet

OR
buy a few shares of a good, "blue chip" stock until you have a 100 shares
then start on the next "core holding"
not as exciting as playing a speculative stock..but long term..much , much safer..

no matter how you play the game
large cap, small/mid cap, speculative
stocks, mutual funds, ETFs, whatever...
have investments that allow you to sleep at night...
if you worry about any investment too much....it's too risky for your temperament...


good hunting

Answer 2

1

Answer 3

Two general rules of thumb:

1) You don't want the commissions you pay on transactions to become a large percentage of your investment. In other words, there's not much point in making a $100 investment if you have to pay $20 in commissions to both buy and sell the stock-- your investment has to go up 20% just to cover the fees.

In general I don't invest less than $1,000 in a stock, and prefer to stick in more. Finding a brokerage with low fees (tradeking, for example) is also a good idea.

2) You want to remain diversified. This can be hard if you have only two or three thousand dollars without making tiny bets that would be very costly due to fees. If you have a larger amount (say 10k+) you can buy significant amounts of a reasonable number of stocks, or buy stakes in one or two companies while keeping bulk of your money in mutual funds.

In a nutshell I would probably save up at least $5,000 if you want to go into the market in earnest. If you want to make a few smaller trades just to get your feet wet that's not unreasonable though.

Good luck.

Answer 4

Penny stocks are loosely categorized companies with share prices of below $5 and with market caps of under $200 million. They are sometimes referred to as "the slot machines of the equity market" because of the money involved. There may be a good place for penny stocks in the portfolio of an experienced, advanced investor, however, if you follow this guide you will learn the most efficient strategies https://tr.im/c8109

Answer 5

I've made a nice profit on a couple of suggestions he's given and plan to start trading his ideas a lot more. I definitely recommend subscribing to https://tr.im/pennystocktrading
Very good research, quality stocks. I was a bit weary of penny stocks from all the bad hype they receive but this guy is pretty legit. He's put my mind at ease with a lot of the fears I've had.

Answer 6

Try reading, "How to Buy Stocks without a Broker" to learn how to get into stocks with very little money, perhaps $100 to start. That way, you can learn and experiment for little more than the price of a couple of dinners out.

Answer 7

Mutual funds and similar investments- anything. Stock investing $500. Stock trading $5000, preferably $25000

Answer 8

Success in the stock markets do not really start from knowing how much money you need to "get your feet wet". You can start with as low as $1000 or as high as $1,000,000 but you will lose all of them in no time.

There are quite a number of things you need to learn before you can even start thinking of the stock markets ...

1. You need to understand how the stock market works and what it is exactly about.

2. You need to know what are the different styles of trading in stocks and shares.

3. You need to read about why so many people lose their shirts in the stock markets so that you can avoid their mistakes and also decide if this is a risk you want to take.

For all these issues and more, you can read about them from some of the articles that I wrote at http://www.mastersoequity.com/articles.htm

After you are adequately armed with the basic concepts and ideas, you need to know how to find profitable stocks to trade or invest in. You can do that the easy way by subscribing to stock pick services (example http://www.stockpickmaster.com ) or you can learn to use charting tools and softwares to find stocks with parameters that you can pre-define. (example http://worden.mastersoequity.com/ )

Remember, the slogan "Just Do It", Just won't do for the stock markets. If profiting in the stock markets is as simple as buying a single stock , then why are so many people still poor?

After you have all the above mentioned knowledge, you need to ask the following golden questions before you can decide whether a stock is worth buying or not :

1. Why are you of the opinion that this stock will rise?

2. Is your opinion valid in the first place?

3. When are you expecting it to rise? Can you hold on for that period of time or longer?

4. What is your expected entry price? After what price would your expected profit margin be too thin to enter upon?

5. Where is your expected stop loss point? What is your stop loss point based on? Where will you tell yourself that it is time to take a loss and get out?

6. Where is your expected profit taking point? What is your profit taking point based on?

7. Does the way you are buying the stock allow you to hold on until your expected profit taking point?

8. How much of your money should you dedicate to this one trade?

9. What is the level of primary, secondary and idiosyncratic risk you are undertaking when deciding how much of your fund to use?

10. What is your cashflow need? Does your cashflow needs allow you to hold the full lifetime of the stock?

After you are able to answer all these questions confidently, THEN you are ready to... PAPER TRADE your stock strategy. Yes, even at this point, you are NOT READY to trade for real. You should trade on PAPER for at least 6 months and become consistently successful BEFORE you take your stock strategy into real life.

Then.. you are ready to start... but there is still no guarantee of success as paper trading is very different from real trading. You will need another maybe 1 year or 2 trading very little money and be consistently successful BEFORE you are ready to increase your stakes.


So, as you can see, success in the stock markets is not easy at all the the less knowledge you have, the more risk you undertake. I lost hundreds of thousands in the stock markets before I become successful.

Take heed and good luck.


All in all, investment and trading is a lifelong education and non stop learning. No one is ever done learning and catching up with changes in the markets.

If you care to read about how I went from completely broke to retired millionaire trading stocks and options by 28 years old, you can go to http://www.mastersoequity.com/

Hope these information helps.


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.

Answer 9

the best trading software http://tradingsolution.info
i have attended a lot of seminars, read counless books on forex trading and it all cost me thousands of dollars. the worst thing was i blew up my first account. after that i opened another account and the same thing happened again. i started to wonder why i couldn,t make any money in forex trading. at first i thought i knew everything about trading. finally i found that the main problem i have was i did not have the right mental in trading. as we know that psychology has great impact on our trading result. apart from psychology issue, there is another problem that we have to address. they are money management, market analysis, and entry/exit rules. to me money management is important in trading. i opened another account and start to trade profitably after i learnt from my past mistake. i don't trade emotionally anymore.
if you are serious about trading you need to address your weakness and try to fix it. no forex guru can make you Professional trader unless you want to learn from your mistake.

Answer 10

Hi...

You need a good education.
Money comes last!

I'm suggesting a list of resources...I can tell you if you don't do this first you will lose your money and stop a very promising career in managing your own money.