Minimum Balance to Trade Full time? | Forex Factory

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Minimum Balance to Trade Full time?

  • #1
  • First Post: Nov 1, 2018 9:12am Nov 1, 2018 9:12am
I was just wondering if any experienced full-time traders are able to do that with a small account. Do I need $50,000 before I can trade full time? I know one should demo trade until they have a consistently profitable trading plan. Assuming one has done all that, what is the smallest account size someone could have while earning enough, exclusively from trading, to earn a living.
  • #2
  • Nov 1, 2018 9:33am Nov 1, 2018 9:33am
Quoting Dasilvja
I was just wondering if any experienced full-time traders are able to do that with a small account. Do I need $50,000 before I can trade full time? I know one should demo trade until they have a consistently profitable trading plan. Assuming one has done all that, what is the smallest account size someone could have while earning enough, exclusively from trading, to earn a living.
It rather depends on both the expectancy of your method and how much you want to earn.

As a rule of thumb you should not risk more than 2% of your account on any one trade. I can only give you the kind of numbers I achieve in a typical year, the range out there would be enormous around this.

I day trade with c.800 trades per year. My success rate is about 55% at about 1:1 net reward:risk average, and I risk 1% of my account on each trade. So, ignoring compounding effects, I'm looking to have about 80 net winners per year at 1% return each, 80% pa. Thus, if I want to earn £80,000 pa then I'll need an account of £100,000 to fund this, assuming my target stats are achieved.

You'll need to do a similar sort of calculation to work out your needs.
  • #3
  • Nov 1, 2018 11:30am Nov 1, 2018 11:30am
There is no yes or no answer. First you need to know what a „living“ costs you.

For some people depending on their location and lifestyle maybe a 500 USD monthly is a living for some people maybe a 50000 is not even a living.

So assuming that you are a very good trader and can constantly achieve a 20% return per year on a 50k funded account this would somewhere equal to a
830 USD monthly (before tax).

Now does this sound sexy to you?

Also keep in mind that there is no guarantee you will always reach your goals. You will also suffer from losing periods and maybe end some month with break even or even negative. That’s just natural.

So regarding to your questions and that you don’t live in the 3rd world, have to pay for electricity, food, insurances and so on...

Better plan with a 250-500k as your minimum risk capital to start trading for a living.
  • #4
  • Nov 1, 2018 1:17pm Nov 1, 2018 1:17pm
It depends on a lot of things but the simple answer is, it depends on your system:

If your system generates proportionally higher return than drawdown, you would need less equity.
If your system generates proportionally less return than drawdown, you would need more equity.

For most systems, I think 50K is pretty much the minimum assuming profits from trading would be your only source of income.
  • #5
  • Nov 1, 2018 1:27pm Nov 1, 2018 1:27pm
So everyone that trades full-time has at least $50,000 in their trading account? All the people in these forums, they're either part-time or they have $50,000? Wow. I didn't realize you needed that much to be a currency trader. Isn't only $25,000 to start trading stocks? I thought people started with forex because you didn't need such a large amount of capital to get going.

Kind of a rude awakening.
  • #6
  • Nov 1, 2018 4:20pm Nov 1, 2018 4:20pm
I would say 100k would be a comfortable capital to trade stress free (almost)
Just have to make 2~5% a month to live comfortably in most western countries. 5% a month should be a realistic goal for most traders who know what they're doing.
i lose money for a living
  • #7
  • Nov 1, 2018 5:14pm Nov 1, 2018 5:14pm
Quoting spotrate
I don't believe so. I think most retail traders on this forum have 5K or less. Case in point, I have a $500 account.
Big guys don't trade forex anyway, its good to learn the basics and get some training but you'd be a fool if you want to stick in an unregulated market with more then 25k
Any serious trader is on Futures.
i lose money for a living
  • #8
  • Nov 1, 2018 8:15pm Nov 1, 2018 8:15pm
Quoting Dasilvja
So everyone that trades full-time has at least $50,000 in their trading account? All the people in these forums, they're either part-time or they have $50,000? Wow. I didn't realize you needed that much to be a currency trader. Isn't only $25,000 to start trading stocks? I thought people started with forex because you didn't need such a large amount of capital to get going. Kind of a rude awakening.
$25,000 min to day trade stocks, Doesn't mean that you can live off an account that size.
  • #9
  • Nov 1, 2018 8:16pm Nov 1, 2018 8:16pm
Quoting Dasilvja
So everyone that trades full-time has at least $50,000 in their trading account? All the people in these forums, they're either part-time or they have $50,000? Wow. I didn't realize you needed that much to be a currency trader. Isn't only $25,000 to start trading stocks? I thought people started with forex because you didn't need such a large amount of capital to get going. Kind of a rude awakening.
Dear Dasilvja,

Not exactly so, there are other things to consider like leverage. Therefore a trader does not have to keep all the funds in the one account, just need to make sure you have liquid funds ready to cover if something goes wrong. One thing you do not want to do is put yourself in a situation where you are forcing trades in order to cover monthly living costs and ideally it would be nice to grow the account at the same time otherwise it is a stagnant race to the end.

From the kind responses so far, we can see that there is really no "Fixed" value of what is needed and I am sure if you search around similar posts will surface that were asked before. It all depends on your situation and factors, as mentioned (what is a suitable living 'value' needed, consistency of your edge, expenses, etc...Loooooong list...... ).

Bottom line for me; Without a proper consistent edge, no reasonable account size will allow you to trade for a moderate living lifestyle while covering all expenses and adding x% account growth per year.

Kind Regards,
Tzamo
"Work hard, put in the effort, and follow your dreams..." -Me
  • #10
  • Nov 1, 2018 9:14pm Nov 1, 2018 9:14pm
Once you develop a system, you will know the answer. For most retail traders and most systems, I think 50K would be the number at which they would be willing to quit their day jobs.
  • #11
  • Nov 1, 2018 9:32pm Nov 1, 2018 9:32pm
Quoting Dasilvja
I was just wondering if any experienced full-time traders are able to do that with a small account. Do I need $50,000 before I can trade full time? I know one should demo trade until they have a consistently profitable trading plan. Assuming one has done all that, what is the smallest account size someone could have while earning enough, exclusively from trading, to earn a living.
Well firstly are you successful yet ?? if you can satisfy people here that you REALLY have a consistently PROFITABLE trading plan NOW then I am quite sure some may very well consider funding you the fully without any conditions whatsoever.
The best way forward is to showcase some realtime trade calls to show that your profitable method is for real as a starter then there is plenty of time to discuss the rests of the other details. Like the saying "don't count the pips before its earned" hehe....I will be very impressed that you have made so much progress from a aspiring trader trading a $300/- account 1n 2017 to become a consistently profitable trader. You must have found your mojos.
Excuse me if I sounded offensive but I am just pointing out the fact. I am looking forward to hear your success story.

Cheers,
  • #12
  • Nov 1, 2018 9:33pm Nov 1, 2018 9:33pm
Quote: Just have to make 2~5% a month to live comfortably in most western countries.


Lol. Which western country is that?
I guess it can be done if you are single, use shared accommodations, take transit and always buy your food on sale.
  • #13
  • Nov 1, 2018 10:36pm Nov 1, 2018 10:36pm
Quoting Oldtraderman
{quote}So, ignoring compounding effects, I'm looking to have about 80 net winners per year at 1% return each, 80% pa. Thus, if I want to earn £80,000 pa then I'll need an account of £100,000 to fund this, assuming my target stats are achieved. You'll need to do a similar sort of calculation to work out your needs.
You can't ignore compounding. It is an integral part of trading if you want to be successful.
  • #14
  • Nov 1, 2018 10:42pm Nov 1, 2018 10:42pm
Quoting Dasilvja
I was just wondering if any experienced full-time traders are able to do that with a small account. Do I need $50,000 before I can trade full time? I know one should demo trade until they have a consistently profitable trading plan. Assuming one has done all that, what is the smallest account size someone could have while earning enough, exclusively from trading, to earn a living.
You can start trading futures indexes with $5,000 You might want to check into NinjaTrader platform and brokerage ... Margin for the ES mini is around $500 per contract last I knew... I don't use Ninjatrder so you will have to double check those numbers... But the point is you can get started trading future for less than most people think And you can make better money once you get things figured out.
  • #15
  • Edited 2:25am Nov 2, 2018 12:55am | Edited 2:25am
Quoting tradestar1
{quote} You can't ignore compounding. It is an integral part of trading if you want to be successful.

The illustration given ignored compounding for reasons of simplicity and clarity.

You can and should ignore compounding if you are planning on regularly withdrawing profits, which you must do if you are trading your account to earn a living.

If, however, you are trading simply to build an account up without withdrawals then, yes, compounding is an important and inherent part of the process. But the question posed in the thread was specifically about trading to earn a living from the account.
  • #16
  • Edited 2:13am Nov 2, 2018 2:03am | Edited 2:13am
"Do I need $50,000 before I can trade full time?" ??? -- That reads as if a huge account guarantees some income.

Most people cant even trade small account without blowing it up or losing money.
Dragon Rider
  • #17
  • Nov 2, 2018 2:43am Nov 2, 2018 2:43am
with good knowledge of both technical and fundamental analysis you would gain a decent amount of money monthly even if you don't start with a lot of funds
  • #18
  • Nov 2, 2018 3:16am Nov 2, 2018 3:16am
I would say that trading full time is an extremely risky endeavor. Especially if you have only 50k. You want to have the flexibility to know that losses will not affect you and that you can trade aggressively when certain set-ups show more potential.
  • #19
  • Nov 2, 2018 4:07am Nov 2, 2018 4:07am
Quoting OutThere
Quote: Just have to make 2~5% a month to live comfortably in most western countries. Lol. Which western country is that? I guess it can be done if you are single, use shared accommodations, take transit and always buy your food on sale.
Ridiculous, 3K in Europe is more then enough to have a comfortable life, have a nice place and a car.
Sure its not enough for a family of 12 but its more then an average single guy earns
i lose money for a living
  • #20
  • Nov 2, 2018 5:04am Nov 2, 2018 5:04am
you need to be consistently profitable before you think of going full time. Otherwise no matter ur account size u will blow it up
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