smallest amount that you can trade?

what is the smallest amount that you can trade? the reason I ask is if you are new to trading and want to "practice" trading with small amounts so you can not lose the bank while you are learning, what is a good way to start with small amounts?

what is the smallest amount that you can trade?

the reason I ask is if you are new to trading and want to "practice" trading with small amounts so you can not lose the bank while you are learning, what is a good way to start with small amounts?

Ikati,

A lot of people on this board have been trading for a LONG time. I have only been doing it for 1.5 years so take what I suggest with a grain of salt. But I think there is really not too small of a trade. Obviously it does not make sense if you have to get a 3-5% win just to cover your commissions. However small is good when you are new. I don't believe in paper trading because I think that people act differently when their money is on the line. Even if you only have a couple hundred dollars on the line the emotional attachment seems to be there. I consider myself in a college level course that will take 4 years before I graduate and another 4 to have a "masters" (At least 4 years). But this is not easy so keep em small until you really know it. And there will be occassions when you think you have it and it begins to feel easy, to only get reminded very nicely by the market the next day that you don't really know what you are doing...yet!

Hope that helps. It will be interesting to see what others add.

SL

Hi ikati.
Interactive Brokers offers a free paper trading account where you can do it all.
Stocks, options, futures, etc.
You are required to open an account with them which will pay you interest.

Minimum for the real trading account:

Individuals, Trading Group Masters, and Broker Masters USD 10,000 (or USD equivalent)
IRAs USD 4,000 (or USD equivalent)
Individuals age 21 or younger USD 3,000 (or USD equivalent)
Advisor and Broker Clients USD 5,000 (or USD equivalent)

You get $1,000,000 in paper money and if you go broke, you do just like the big banks and go to the RESET window and get another $1,000,000!

Also their commissions on actual trading is very small, so you could "pull the trigger" on a small trade and not be out a lot of money.


Here is a link to their paper trading info: LINK

IB offers a Paper Trading Account which allows traders to use the full range of IB trading facilities in a simulated environment using real market conditions. Use this test environment to:

• Learn TWS features such as order types without risk.
• Learn market dynamics in new exchanges and products.
• Simulate and test trading strategies.
• Test Application Program Interface (API) applications.

Edited by Rogerdodger, 15 March 2008 - 03:32 PM.

Thank you very much for your comments. This is a big help!