How Much Money Do You Need To Trade Futures

How Much Money Do You Need To Trade Futures – While it may seem like an easy answer, there is actually a lot of depth and considerations when creating a budget for your new trading business.

To fund your futures trading account, you can start with as little as $100 USD. But this is not your entire cost.

How Much Money Do You Need To Trade Futures

We will go through this section briefly and quickly. But this part is not often shared online and traders learn the hard way. So I want to make sure you have the full picture.

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Platform Fees – this is the software you will use to view charts and execute trades. There are a variety of fee structures, from free to monthly, to outright lifetime license purchases.

Data/Connection Fees – Futures are different from stocks in that you have to pay to get streaming data to even see the price charts of the assets you will be trading. The CME bundle is $30 USD per month and is all you need. If you trade in a corporate account, you are considered a professional and those fees increase to $120 USD per month, per exchange.

Technology – you can start with what you have now. One thing to consider is to check the system requirements of your trading platform and make sure your computer can handle it. If you have to upgrade, that can mean a significant additional cost.

Trading Education / Community – no professional trader ever works in isolation. Look at professional agencies around the world, they have multiple people and it’s a team environment.

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This is the area that most new traders save on, and end up losing money quickly and not being able to pay a good education afterwards. Budget this as part of your investment in yourself and your new trading career. It will make a huge difference and speed up your journey.

These areas are often overlooked, and traders stress very early in their journey if they come up as a surprise. This is why I wanted to start with this list.

Next we will look at the actual costs associated with executing the trades. How much money do you really need?

The minimum amount of money you need depends on which company you choose to open your brokerage account.

Solved 2. Your Discount Brokerage Firm Charges $9.50 Per

Margins are set by the Chicago Mercantile Exchange for futures contracts. The margins are quite high. You can read more about margin requirements here.

There are two types of margin, initial margin, and maintenance margin. The blog above will explain each in detail.

Depending on the broker you choose, they will offer you a reduced day trading margin. This will ultimately determine how much money you need to have in your account for each contract you trade.

The range varies from as little as $500 to $5,000 USD per contract for the mini products. But if you’re brand new, you can start trading micro futures for as little as $50 to $400 per contract. Again this depends on the broker you choose.

How Much Money Do You Need To Start Trading?

I recommend everyone to start with micros these days, it will save you a lot of time, money and most importantly help you build your strategy without risking too much money.

It is extremely important that you take the time to research and choose the right broker for you. This is the part new traders rush, after and almost always regret.

At this point you realize that it can require between $200 to over $5,000 USD to get started. It really depends on HOW you want to start, and where you are already in your trading journey.

In the next section I will recommend a sample plan for a brand new trader and how to get started.

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At the beginning you are especially vulnerable, and more money means more liability. Why risk capital in your learning stage, if you don’t have to?

I advise novice futures traders to start by investing in a high quality education. We all want the most trained doctor to look after our health. Why wouldn’t you want a highly educated and well trained person to be your money manager? Especially because it’s you!

The beginner traders journey takes a few months of learning and practice before you can ever use real money. As you go through the trading course and get ready for live trading, you can actively save more money to fund your account.

Working with hundreds of thousands of traders in my trading career over the last 20 years, I can tell you that usually the traders who succeed the fastest are the ones who started by investing in their education.

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Now it is also important to mention that you do not want to spend $50,000 USD on a course. But why?

Truth is, the most important lessons you will learn directly from the market. An education is just a bridge and a kind of guide.

And now we can finally get to the original question. How much money do you need to trade futures?

You can start with as little as $100 USD when you start trading the micro futures. Which is where you should start.

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I would recommend trading micros, but funding your broker account with at least $1,000 USD. This will leave you some room, and you will not be a few losses to blow your first trading account.

At the beginning you want to start small. Your trading losses will be small, and your education will be cheap.

I have never seen anyone regret starting small. In fact, the most profitable traders I know, some of whom started out as millionaires from other lines of work, started small.

I would love to hear from you, how much do you plan to start your future trading journey?

How Much Capital Do I Need To Start Trading?

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The information contained in this post is for educational purposes only and does not constitute investment advice. The risk of trading in securities markets can be substantial. You should carefully consider whether engaging in such an activity is suitable for your own financial situation. TRADEPRO Academy

Is not responsible for any liabilities arising as a result of your involvement in the market or individual trading activities. In this post we run through some examples of how much money you will likely require, based on your trading results, to replace your current income.

Many 9-5 workers envy the lifestyle full time traders seem to have and the income they can generate, all while working from the comfort of their home.

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In this video, Duncan Cooper outlines what is needed in terms of your trading results, the income you desire, and the amount of capital you need to reach your monthly income goals.

Every trader has a different situation. Each has different trading results, and different capital amounts available for trading. I’ll walk you through a model I use, and you can adapt it to your own so you can determine how much money you might need to trade full time.

Let’s get into the first topic. If you are considering trading full time, you need to prove that you can make a consistent return per month and that you can show a consistent return over a 12 month period.

In the example I will walk you through, you should be able to show an average return of 6% per month.

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If you can only make a return of 2% per month, you will need three times the trading capital to achieve the example I will work through.

As an example, I will use a $6,000 trading income per month. And I’m basing this on the average salary in Australia, but you may need a lot more. When trading, you should create an average return of $6,000 per month.

Let’s look at making a trading income of $6,000 per month based on achieving a return of 6% per month. The trading capital that we are trying would be $6,000 divided by six times 100, which is $100,000.

You could trade with less capital, but you would have to risk more per trade and make a greater percentage return on your trading capital.

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Based on this simple model, the spreadsheet below highlights how much capital you need depending on the percentage return you can achieve per month.

Table one shows that to make a trading income of $6,000 per month, based on achieving a return of 6% per month, you need $100,000 trading capital. And this would be the perfect amount of trading capital needed to reach the trading income goal of $6,000 per month.

​​​​​​​However, if you can only make a return of 2% per month, you would require $300,000 of trading capital. But if you are a very consistent trader and can make 10% per month, you don’t need $60,000 in trading capital.

Of course, you can use the power of leverage to reduce the required amount, as shown in table two, but then you have to

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