Quote Originally Posted by Montmorency View Post
Of course, $5000 is not usually a small amount in personal terms. Is there a real minimum threshold for starting trading below which there is no meaningful experience to be gained or returns compounded?
Trust me brother, if you think $5000 is too much money, then you cannot even entertain the idea of trading. I'm sorry.

In order to make money consistently, you have to be well capitalized, because YOU WILL LOSE MONEY.

The key is to try and make sure your winners are greater than your losers.

5k is nothing in trading. Look at the prices of the major stocks, those that move significantly( volatility is actually a good thing for price movement). Most of those prices are $50 or above. So, with 5k your only able to buy a max of barely100 shares, and that's not advisable because you don't ever want to have 100% of your equity at play at one time, especially in one stock. Note : I personally don't trade stocks, I trade futures. You can trade futures with $5,000 also but it is not advisable. Futures have better buying/selling leverage than stocks. Example. Apple's price is at $115/share. To buy 100 shares you will need to have $11,500 in your account. To trade the Nasdaq Index in futures, which Apple is in, you would need only currently $3,960 in your account. That $3,960 is actually a deposit which you get back when you are out of the trade. You basically have more purchasing power for less money.

I apologize if I'm not clear in any of my definitions but I'm not a teacher. I'm actually a truck driver for the last 30 years. I started trading in 2003 and have actually traded only 5 full years since 03'. So you see, trading takes time, patience, learning and a lot of ups and downs if you are NOT disciplined, which I wasn't in the beginning.

Just be patient. Live your life, get your career, stay out of debt, put a portion aside for trading and in the meantime find a trading strategy that fits your personality and test it, then test it some more, then learn it more, then test it more, and keep reading anything you can about trading until the day you are ready to trade with your own money. That day my friend is when the REAL LEARNING begins.

What people need to focus on in trading is NOT how much money you are going to make, rather how much are you going to lose. You must know what you will do in any trading situation even before you put the trade on.

If you concentrate all your energies on minimizing your risk, you will come out on top in the long run.