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Tuesday, July 15, 2008

How Much do you Need to Begin Investing and Trading?

Challenge Accounts:

Investing Account Balance:
Stock / Futures Trading Balance: $861.20 (Within a trade)
Online Savings Balance: $37.30

Personal Trading Thoughts: Looks like our move in Soymeal has started. Profit stop is in to take profits at twice our risk ...

Personal Investing Thoughts: Overall, I'm just watching and waiting. Summer is here, and the market is generally weaker in the summer, so I'm not a buyer. Many years, I turn my DRIP off in the summer, and receive straight cash. But not this summer. We've been in a bear market, and the market is offering bargain prices on many stocks. Therefore, my DRIP will remain on, so that I can accumulate more shares at better prices to DCA ...

One question I receive quite often is, "How much do I need to begin trading?" As a rough outline, I recommend $25,000.00 for trading, and $25,000.00 for investing. Of course, this is variable. As I'm demonstrating with the Challenge Project. You simply need a money management strategy to implement, if you're going to bypass those rough outline amounts. I discuss that in this video ...

* * *

Investing Account Balance: $175.08
Stock / Futures Trading Balance: $861.20 (Within a trade)
Online Savings Balance: $37.30

Total Trades: 4
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $65.50
Average Loss: $79.84
Accuracy Rate: 25%
Average Reward: $179.75
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Down - ($59.68)

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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