NEW 💥 How much money do you NEED to Day Trade?! 🚀

what's up everyone alright so in this episode I'm gonna answer that question that so many of you guys have been asking how much money do I need in order to start day trading and what I've also done is I've put together a few case studies of my students who have taken small counts and turn those small counts into full day trading counts and the ability to live life completely on their own terms thanks so learning the strategies that I teach so as you go through this video or as you watch the case studies in the link below one of them is a podcast of a mentor session that one of my students is now teaching to beginner traders who are at the very beginning of their journey so as you're going through all that if you have questions you have comments please leave them below I personally respond to every question comment post on my channel and as always I hope you guys really enjoy this episode and please give me a thumbs up if you do alright let's get into it how much money do you need in your account to start day trading that is the most popular question that beginner traders will ask me so what I'm gonna do is I'm gonna flip that around on you and I'm gonna ask you two questions number one what's your daily goal how much money in a perfect world are you wanting to make each day as a trader alright now let's just say for the sake of argument did you say another bucks alright extra hundred dollars a day would do the trick alright now the second question is how much money do you have to start day trading with no this is a big variable because some of you guys are gonna say well I've only got five bucks give me a thousand some of you were kind of you know in the middle maybe three thousand to five thousand and some of you guys you've got bigger accounts so you're going to be you know maybe ten 25 or 25 thousand and up now why did I break it down into these categories well February 27 2001 the PDT rule was enacted and the PDT rule states that you must maintain a minimum account balance of $25,000 if you want to date trade more than three times a week now there's ways around it and there's ways you can work within the PDT rule so if you've already got 25,000 or more then you don't even really have to worry about that you can start daydreaming right away even if your goal is only a hundred dollars a day but for those of you guys down here we're in here and this is where I was when I was getting started you've got a $500,000 account size or that's how much you think you can put towards trading well work with this can only trade according to the pp rule three times a week that's gonna be really hard to grow a small account to give you context when I did my last small account challenge it took five hundred eighty three dollars and turned it into over a hundred grand in 45 days and I traded an average three times a day three times each day 15 times a week so that means I was trading five times more than someone who is restricted by the PDT rule now it doesn't mean you couldn't trade in the cash account and work within the Pitti rule it certainly can but I grew my account five times faster so how did it do that well you've got two types of brokers you've got your onshore domestic brokers us brokers and these are going to be brokers like TD Ameritrade good catch thank you nice compliment also who's gonna be brokers like TD Ameritrade etrade Interactive and then you've got your offshore brokers and the offshore brokers are kind of interesting most of them are located in the Caribbean there's a couple that are in Europe they'll accept US accounts us traders can trade there that is at least the case as of today and what's interesting is that because they're located offshore in the Caribbean they're not in the United States they don't enforce the PDT rule so you can open a day trading account now let's just say all things the same that you could trade with $500 so actually let's go up to a pass so in terms of your daily goal you bet your daily gold 100 a day what I want to do is I want to multiply that by 10 $1,000 that is what I would say would be your minimum account size if you're over here in order to hit that hundred dollar a day goal and there's a reason for that over here if you set up an account with $1,000 most of these brokers will give you a minimum of four times leverage I mean times four that means you could day trade with $4,000 some of them will even give you up to six times that means you could day traveled up to six thousand dollars so let's just think about that for a second you set up a one thousand dollar trading account your goal is a hundred dollars a day that's ten percent you're trying to grow the account ten percent each day however you're allowed to day trade with at least four thousand dollars okay so four thousand dollars let's say you see a stock that's priced at three dollars and fifty cents three dollars and fifty cents you buy 1,000 shares how much money do you have in the trake $3,500 $3,500 in the tray now a thousand is your own money the other 2500 you're basically borrowing from the broker they don't make you pay interest or anything like that when you date trade so you can go ahead and borrow that money you take a day trade and then you close it yeah of course how to manage risk and be really mindful about where your max losses we talk about that a lot in risk management so right here you've got three dollars and fifty cents 5,000 shares now the stock goes up to 360 by 1,000 shares equals $3,600 and you have just made $100 just like that now if this goes up to you know 370 380 you might end up making three four five hundred dollars with an account that has just a thousand bucks in it what I always kind of say for beginner traders is that if you can get 10 cents a day out of the market you're doing well 10 cents a day 10 cents and that's per share and that's gonna be on a stock that's 350 to 360 that's a hundred bucks with a thousand shares and you can do it with a one thousand dollar balance now of course if you can put three thousand to five thousand dollars in then you can multiply that by three four or five and now you're looking at three hundred four hundred five hundred dollars a day and literally I took five hundred eighty three dollars and turned it into over a hundred thousand dollars in 45 days trading an average of three times a day alright so five times as much as you can trade over here now if you if you're on this side you've got two options all right option number one would be you trade with the cash account so I know some of you guys are gonna say hey Russ you know why go over here and trade offshore when you can just trade it the u.s. to the cash account and then you don't need to maintain the twenty five thousand dollar minimum balance hey problem solved right not so fast here's the problem in the cash account cash account means that when you take a trade so let's just say for instance you have a thousand dollar cash account you've got a cash account all you can do is trade with that thousand dollars what you don't get is the times for you don't get the leverage you don't get the margin so all you have is the thousand dollars now if you take a tray obviously this stock at three dollars and fifty cents you're not going to be able to buy a thousand shares you're gonna be able to buy in a two hundred and fifty or something like that you're you're obviously gonna be really restricted now with two hundred and fifty shares you get into the 350 it's got to go the way all the way up to 390 in order for you to make you know just about $100 that's 40 cents per share that's a 10% move on that stock on the other hand over here this trader was able to make the same hundred dollars on not a 10% move but you know like a 2% move because they're using leverage now certainly you can trade here you can trade a cash account but the other problem is not only do you only have a thousand dollars but every time you take a day trade you've gotta wait two days for that trade to settle it's kind of like waiting for a check to clear the bank you've got to wait two days before you can trade you that money again so what's really the difference between trading the thousand dollars here or the thousand dollars here with a margin alright so on this side we've got the margin account now with the March of the county put in a thousand dollars okay and most brokers will give you at least two times leverage on that money two times leverage so you've got now two thousand dollars all right not that the only thing is you can only trade three times a week until you cross that 25 in dollar burger now you've got your leverage so you'll be able to grow the account of a faster and if a stock is really really hot we have one of those days where you know stock is at $2 then goes up to 250 three dollars four five six seven you could trade that stock three times in one day and you might be able to make five hundred a thousand or even two thousand dollars in one day using up all three of your trades but then you can't trade again for another five days so my two cents is that if I have a small account and you guys know obviously I do small account challenges the fastest way to grow the account is right here I've got leverage and I'm unrestricted in terms of the number of day trades I can take I can take as many as I want now if I really want to challenge myself I want to stick with a u.s. broker t v-- ameritrade Dietrich I can do that too and that's a little bit a different challenge it's gonna be a little slower I'm gonna have to really focus on a quality setups but it can be done now of course if you're one of those traders that has twenty five thousand dollars plus making a hundred dollars day well you can do all of this would that count the only thing that I would say is that since you really only need about a thousand or two thousand dollars to make $100 a day the extra twenty four grand it's not really doing much so if you put that twenty four thousand dollars into almost any ETF or you put it into a dividend paying stock then you could earn money on your money while actively day trading with the small amount of money that you really need to trade alright so I hope this helps you guys understand how much you really need in order to start day trading I would say it's company really comes back to your daily goal what's your daily goal if it's fifty day 100 day if it's 200 day multiply that by ten and that'll get your training right over here doing really well daily goals a hundred dollars a day and you're going to be on the margin side over under 25,000 well yeah you're gonna have to you're gonna have to move that up a little bit I would say if your goal here is 100 a day and you're planning on trading with the US account and you're going to be in this path right here you're probably going to need closer I would probably take this down to realistically and more like times 50 you're really probably going to need closer to 4,000 or 5,000 dollars in order to make that hundred dollar a day consistently and ultimately it's gonna be a couple of trades a week where you total 500 dollars a week so it's gonna take a little bit more work can you do it absolutely are you up for the challenge you tell me all right questions comments leave them down below as always I respond to every question comment post on channel I'll see you guys for the next episode more about trading check out some of the links in my description and if you have questions ask them in the comments I personally respond to every question posted on my channel and don't forget to subscribe [Music]

Channel: Warrior Trading

Views: 1,715,438

Keywords: day trading, day trading strategies, trading strategies, how to day trade, beginner trading strategies, momentum day trading, stocks, trading, how to trade, stock trading, penny stocks, pdt rule, shares, float, volume, candles, profits, Wall St, finance, brokers, Ross Cameron, warrior trading, day trade warrior, day trade, how much money do you need to day trade

Id: RTuq7QXniFc

Length: 12min 7sec (727 seconds)

Published: Sat Nov 23 2019